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ONGC Videsh acquires oil block in New Zealand

ONGC Videsh Ltd, the overseas investment arm of India's biggest energy explorer, has won an offshore oil and gas block in New Zealand, the first domestic firm in this sector to have made it in that country.

OVL won an offshore exploration permit in the Taranaki Basin, in the same region as several commercially successful oil and gas fields.

The Indian firm was among those who were declared winner of the 15 oil and gas exploration licences by New Zealand's Energy Ministry.

Others who walked away with exploration licences included US giant Chevron and Norwegian state-owned oil and gas company Statoil. OMV New Zealand, a subsidiary of the Austrian oil major OMV and already producing oil and gas offshore Taranaki, was awarded one offshore Taranaki and one Pegasus permit.

Local major Todd Exploration, in partnership with Beach Petroleum, took one offshore Taranaki permit, while Canadian onshore producer TAG Oil NZ took a further two Taranaki onshore permits.

New Zealand awarded six permits for onshore blocks, including two on the west coast of the South Island, and nine offshore block. Of the total, seven permits were for exploration in the Taranaki region.

OVL has taken a 12-year permit in the Taranaki Basin, according to the announcement.

This is OVL's maiden bid for an exploration acreage in New Zealand. OVL has 35 projects in 16 countries like Venezuela, Colombia, Brazil, Mozambique, Sudan, Iraq, Iran, Vietnam, Bangladesh, Myanmar and Russia.

OVL produced 8.36 million tonnes of oil and oil equivalent gas in 2013-14 fiscal, up from 7.26 million tonnes oil equivalent in the previous year.

It recently acquired 2.7 percent stake in a Azerbaijan oilfield that produces about 700,000 barrels of oil per day.

Also, it picked up 16 percent interest in a giant gas discovery area in Mozambique. The offshore gas discovery has recoverable reserves of 50-70 trillion cubic feet, out of which OVL's share would be 8-11 Tcf.

The block has potential to become one of the world's leading LNG producing hubs, production expected by 2018.

New Zealand launched the exploration round last year with a view to beef up oil-export earnings and trim dependency on agriculture. Last year it awarded 10 licenses, all of them to companies already exploring for oil and gas in the country.

Crude oil is the fourth-biggest component of New Zealand's export basket in value terms after dairy, meat and wood. However, production has fallen over the past five years, with 2012 oil output averaging 40,300 barrels a day, down 13 percent year-on-year, and nearly a third compared with 2008.

PTI

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Updated Date: Dec 09, 2014 19:36:48 IST