New Delhi: ONGC Videsh Ltd (OVL) is likely to relinquish a Vietnamese oil block in South China Sea after failing to drill wells because of hard seabed in the area, a move which will impact on the strategic presence of India in the region witnessing growing Chinese influence.
With the global arm of state-owned ONGC citing "techno- commercial considerations" for pulling out of the Block 128 in Vietnamese waters, the establishment here also seems to be disinterested in continuing the project which was not "economically viable".
The company has maintained "drilling rig was deployed on the location in September, 2009. However, the well could not be drilled with the rig as it had difficulty in anchoring at the location due to hard sea bed. The drilling activity was terminated......The company has invested about USD 46 million till 31st March, 2011."
The Block 128, which is an offshore deepwater block, is located at a water depth of more than 400 metres with 7,058 sq km area in Vietnam.
However, the move assumes significance in the backdrop of increasing Chinese influence in the region, parts of which are also claimed by Vietnam, Taiwan, Malaysia, and Brunei and which is witnessing wider territorial dispute. China claims nearly the entire region which is believed to contain large oil and natural gas deposits.
Citing territorial dispute, China has also raised objections to Indian oil exploration projects in the region.
India has been maintaining that it was for the countries in that region to sort out any territorial dispute and finally, also that in the international waterways, there should be freedom of navigation.