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OVL seeks 2-year extension for exploring Vietnamese oil block

New Delhi: ONGC Videsh Ltd, the overseas arm of Oil and Natural Gas Corp (ONGC), has sought yet another two-year extension to explore a Vietnamese oil block in the contested waters of the South China Sea.

Officials said OVL has applied for a sixth extension to explore Block-128, the licence for which was valid till June 15, 2019.

While India wants to maintain its strategic interest in the South China Sea, Vietnam wants an Indian firm to counter China's interventions in the contested waters.

The officials said OVL had in May applied to the Vietnamese authorities for the sixth extension of the exploration licence for the deepsea block and is likely to get it.

"We have a commitment to drill one well on the block and to fulfil that we have sought an extension," one of the officials said.

Another official said the company had a couple of years ago drilled a well on the block but it could not reach the target depth and so it now has to drill the well all over again.

"If we don't drill, we are liable to pay penalties," he said.

OVL had signed production sharing contract (PSC) for the 7,058 sq km Block 128 in offshore Phu Khanh Basin, Vietnam, on May 24, 2006. The Ministry of Planning and Investment (MPI), Vietnam, issued an investment licence for the block on June 16, 2006, being effective date of the PSC.

The company has not found any hydrocarbon in the block but is continuing to stay invested to maintain India's strategic interest.

OVL first took a two-year extension of the exploration period till June 2014 and then another one year. A third extension was granted on May 28, 2015, and a fourth in 2016. It got the fifth extension for two years in 2017.

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