India's ONGC Videsh gets three more years to explore South China Sea

By Team Newsable | First Published Aug 19, 2023, 11:45 PM IST

The move reaffirms India's strategic commitment to the region despite territorial conflicts and China's claims over the area. The block partially falls within the contentious "nine-dash line," and while no commercial oil and gas reserves have been found in 17 years of exploration, India's strategic interests persist

Oil and Natural Gas Corporation (ONGC) Videsh, an Indian Public Sector Undertaking, has announced a three-year extension for exploring 'Block 128' in the South China Sea, according to a post on the micro-blogging platform X (formerly Twitter). Disputes over territorial claims in the South China Sea have a long history, but tensions have escalated in recent years as China and its neighbouring countries have solidified their positions on the various islands and reefs.

ONGC Videsh, the overseas investment branch of India's leading oil explorer Oil and Natural Gas Corp, reaffirmed its strategic commitment by securing its eighth extension, which now extends until June 15, 2026.

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The company's exploration efforts have centred around the coastal area of Vietnam, leading to diplomatic friction between India and China. China's expansive territorial claims encompass the majority of the resource-rich South China Sea, and its military presence in the region has increased significantly.

Notably, a portion of 'Block 128' lies within the controversial "nine-dash line," which outlines China's expansive claims in the sea. This region facilitates over $5 trillion in annual trade and is also subject to claims from other nations including the Philippines, Brunei, Malaysia, and Taiwan.

Although ONGC Videsh has been exploring the block for 17 years, it has yet to discover commercially viable oil and gas reserves. However, India's strategic interest in the South China Sea has prompted the company to maintain its presence.

The initial production sharing contract for deepwater exploratory Block 128, covering an area of 7,058 square kilometres in Offshore Phu Khanh Basin, Vietnam, was signed between OVL and PetroVietnam, the national oil firm of Vietnam, in May 2006.

OVL's exploration journey has involved acquiring 3D seismic data and reprocessing 2D seismic data as part of its phased exploration period. Additionally, petroleum system modelling studies have been conducted using data provided by PetroVietnam.

Since its inception, OVL has secured multiple extensions for the exploration period, starting with a two-year extension that lasted until June 2014. Subsequent extensions followed, with the latest being the seventh extension lasting until June 15, 2023. This latest extension marks the eighth iteration, continuing India's strategic commitment to the exploration efforts in the South China Sea.

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