India in talks to develop Kazakh oil block

The Abai oil block in the Caspian Sea is reported to have reserves of about 2.8 bn barrels oil equivalent

Almost a year after the Kazakhstan government played spoilsport in a deal where ONGC Videsh was to acquire 8.4% stake in its Kashagan oil field, India is in talks with that country for developing Abai oil block in the Caspian Sea.

According to those close to the development, Magzum Mirzagaliev, vice-minister, oil and gas, Kazakhstan, has offered the Abai block to ONGC Videsh in a recent inter-governmental meeting. "We are looking into the offer by them. What happened last year is history now," said a senior petroleum ministry official. The block is reported to have reserves of about 2.8 billion barrels oil equivalent. There are about 300 oil and gas fields in the basin, of which 170 fall in Kazakhstan.

Though OVL and ConocoPhillips had struck a deal last year, the local government exercised its preemptive buy-out right and acquired the stake by ConocoPhillips and later transferred it to China National Petroleum Corporation. In 2005, too, India had lost a $4.18-billion deal to China from PetroKazakhstan. Mirzagaliev offered the block during petroleum secretary Saurabh Chandra's visit to that country last month.

In December, the Kazhakhstan government had rolled out red carpet for India by inviting it to be a part of the Eurasia Project. A consortium in this regard is likely to be in place by mid-2014, as the country targets to drill at least one super-deep parametric well by 2020.

ONGC Videsh already owns 25% participating interest in Satpayev exploration block. Satpayev exploration block, located in the Kazakhstan sector of the Caspian Sea, covers an area of 1,482 square kilometre at a water depth of 6-8 metres. "The new block that they are offering is adjacent to Satpayev Block," he added. India is planning to conclude exploration activities in the block by 2015. OVL's share of investment in the project was about $113.93 million.