PM launches OVL oil block project in Kazakhstan

Prime Minister Narendra Modi today launched maiden drilling by ONGC Videsh Ltd in the Satpayev oil block of Kazakhstan where the Indian firm is investing USD 400 million.
"PM @narendramodi and (Kazakhstan) PM Massimov launch the first exploratory drilling of Satpayev oil block by OVL and KazMunaiGaz," MEA tweeted.
OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), had bought 25 per cent of Satpayev oil block in 2011. It paid USD 13 million as a signing amount to Kazakhstan. In addition, it paid USD 80 million as a one-time assignment fee to KazMunaiGas (KMG).
On top of this, OVL had committed a minimum exploration investment of USD 165 million and an additional optional expenditure of USD 235 million to the project.

Officials said the company has already invested USD 150 million in Satpayev and will invest a total of USD 400 million in exploration.
The Satpayev block, measuring 1,582 sq km, is located in the North Caspian Sea, in water depths of 6-8 m, and has two prospective areas that hold an estimated 256 million tonnes of oil and natural gas resources. It lies near four major discoveries.
OVL estimates a peak output of 287,000 barrels per day from the Satpayev and Satpayev Vostochni (East) structures.
Delays and cost overruns have dogged Kazakhstan's efforts to expand offshore production of oil and gas. OVL had planned to drill two exploration wells on Satpayev in 2014 and 2015 but delivery of a drill rig has been delayed and will start drilling next month.