OVL earmarks Rs 9,000-cr capex for FY10

ONGC Videsh Ltd has earmarked capital expenditure of Rs 9,000 crore for the current fiscal during which it plans to drill exploratory wells and develop blocks in Vietnam, Syria, Nigeria, Egypt and Brazil, a top company official said.     

"We've got (a capex plan of) Rs 45,000 crore for the Eleventh Five Year Plan (2007-2012). So, our expenditure for this year comes to about Rs 9,000 crore ... Slightly less than $2 billion," ONGC Videsh Ltd (OVL) Managing Director R S Butola told PTI here.     

OVL has already expended Rs 20,000 crore in the past couple of years, he added.     

The overseas arm of state-run Oil and Natural Gas Corp has already spudded four wells in the North Ramadan block in Egypt and plans to drill an additional well in the field, Butola told an analyst conference here last night.     

The North Ramadan Block (Block 6) is an offshore block located in the Gulf of Suez in an area of about 290 square km.     

OVL holds a 70 per cent participating interest in the block, while the rest is held by IPR Energy Red Sea (IPR).     

The consortium had discovered an oilfield in its first exploration well in 2007.

The Indian firm is also currently exploring Block XXIV in the central-eastern part of Syria in which it holds a 60 per cent interest.        

"Exploration work is going on in our Syrian property. We have to establish the commerciability," Butola said.        

"We are planning to drill one more well in Nigeria in the second-half of this year. We hope, if we succeed in appraisal of the reserves, then both blocks can be put on production in the current year — maybe in the last quarter of this financial year," he said.        

He said the company plans to drill wells in offshore deepwater blocks 127 and 128 in Vietnam and blocks BM-S-73 and BM-ES-42 in Brazil where it holds the operatorship with 100 per cent interest.        

"There will be new production from oilfields in Brazil this year. It will be a small quantity, but it shall be incremental oil," Butola said.        

OVL also hopes to sign a contract with the Iranian Government to bring into production the Farsi offshore block that was awarded to a consortium of OVL, Indian Oil Corp and Oil India Ltd in 2002.

"In Iran, we have made the discovery. Now, in order for us to go into the next phase of development, we have to enter into a Development Service Contract," he said.        

The block is estimated to hold recoverable reserves of likely 12.8-trillion cubic feet (tcf).        

OVL has submitted a development plan for the 3,500 sq km block to the Iranian authorities.        

"We have requested the Government of Iran to initiate negotiations with us for a Development Service Contract. So, once this contract is signed, this property will also be put on production," Butola said.