ONGC Videsh to Invest $400m on Satpayev

ONGC Videsh Limited (OVL), the external arm of state-run explorer Oil and Natural Gas Corporation, will invest up to $400 million for exploration activities in Kazakhstan, an official said on Wednesday.

OVL will invest the amount for exploration activties in its Satpayev block in the central Asian nation, its managing director N.K. Verma said.

“While we have 25 percent stake in the block, we will be funding the entire exploration activities. The company has already invested $150 million in the block. We have also committed to invest up to $400 million over there,” Verma told reporters after Petroleum Minister Dharmendra Pradhan met Kazakhstan`s Energy Minister Vladimor Shkolnik during the 12th India-Kazakhstan inter-governmental commission meeting here.

OVL acquired 25 percent stake in Satpayev in 2011, paying $13 million as a signing amount to Kazakhstan.

In addition, it will pay $80 million as a one-time assignment fee to KazMunayGas.

“Co-operation in the energy sector was a focus of the meeting. ONGC Videsh is working there and has seen satisfactory progress there. We are also studying the feasibility of transporting hydrocarbons from Kazakhstan to India through a pipeline,” Pradhan told reporters.

“It is an energy rich country; Signed bilateral protocol; Agreed to identify concrete projects of cooperation,” the petroleum minister tweeted later.

OVL had earlier planned to drill two exploration wells on Satpayev but the delivery of a drill rig has been delayed and will start work only next month.

“There has been satisfactory progress on this project. We expect exploratory drilling to commence early next month,” Pradhan said at the joint meeting.

The Satpayev block, measuring over 1,500 sq km, is located in the North Caspian Sea in water depths of six to eight metres, and holds an estimated 256 million tonnes of oil and natural gas. OVL estimates a peak output of 287,000 barrels per day from the Satpayev and Satpayev Vostochni (east) structures.

Prime Minister Narendra Modi is due to visit to Kazakhstan in the first week of July.