(Cogencis, Sukalp Sharma, 20.Aug.2019) — ONGC Videsh Ltd plans to relinquish three exploratory blocks–RC-9, RC-10, and GUA OFF-2–in Colombia in the current financial year ending March due to adverse hydrocarbon prospectivity in these blocks, sources with direct knowledge of the matter told Cogencis.
ONGC Videsh is the overseas investment arm of state-owned upstream giant Oil and Natural Gas Corp Ltd. ONGC Videsh has participating interests in seven projects in Colombia, including the three offshore blocks it plans to exit in the current financial year. These three blocks are located in Colombia’s offshore Guajira Basin.
ONGC Videsh acquired 50% participating interest in blocks RC-9 and RC-10 in November 2007. The remaining 50% stake is owned by Colombia’s national oil company Ecopetrol. Ecopetrol is the block operator for RC-9, while ONGC Videsh is the operator for RC-10.
In GUA OFF-2 block, the entire 100% participating interest is held by ONGC Videsh. This block was acquired by the company in December 2012.
“Exploration activities in RC-9 and RC-10 did not give encouraging results. So it was decided to relinquish the blocks and that is expected to happen in the current fiscal,” said an ONGC Videsh official, who did not wish to be named.
As for GUA OFF-2 block, it was acquired based on the prospectivity of the RC-10 block and since the latter is being relinquished, ONGC Videsh will be exiting GUA OFF-2 as well.
In RC-10 and GUA OFF-2, ONGC Videsh has some outstanding minimum financial commitment, which is being transferred to CPO-5 block, in which the company owns 70% participating interest and is the operator as well. Around $3.50 mln are being transferred from RC-10 and $1.40 mln from GUA OFF-2 to the CPO-5 project, said the official.
Over the years, ONGC Videsh invested over $36 mln in RC-9, $15.50 mln in RC-10, and $2.10 mln in GUA OFF-2.
ONGC Videsh and Ecopetrol had in 2014 decided to together offload 30% stake in RC-9 and RC-10 blocks to a strategic investor. After scouting for around one-and-a-half years, the partners were unable to find an investor and shelved their plans of a stake sale.
ONGC Videsh also used to hold 40% participating interest in block RC-8 in the same offshore Guajira Basin. The company and its partners relinquished the block in 2015 after Colombian authorities declined to approve an extension for further exploration.
US$1 = 71.63 rupees
Edited by Vandana Hingorani
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