NEW DELHI, JAN 4: ONGC Videsh Ltd has run into serious roadblocks with Vietnam over issues relating to pricing and equity stakes in the Indian company's lucrative three trillion cubic feet gas find in that country. Pending a solution, OVL has put all exploration activities in the field on hold.Vietnam has offered to pay only $1.30 per million British Thermal Unit (MBtu) of gas whereas OVL is holding out for a price of $1.75 per Mbtu. Another snag is the desire of Vietnam's public sector oil monopoly Petro Vietnem to pay in local currency while OVL's demand is for designation of the value of per unit of gas in dollars or in any other convertible currency.What is more, Petro Vietnam wants to increase its stake in the OVL gas field from 5 per cent to 10 per cent for free of cost.
These demands have forced OVL to temporarily apply the brakes on evacuation of gas in Vietnam. "We will not proceed with any further work in the field unless the snags are sorted out," a top offical of the company said.An OVL-ONGC
team is rushing to Vietnam to hold negotiations on possible solution to the impasse. The team is being led by ONGC finance director who has been mandated to work out a settlement. Two parameters - the cost of production and the international price of gas - will be taken into account while trying to resolve the central issue of gas pricing.
OVL holds a 55 per cent stake in the gas field, followed by British Petroleum and Stat Oil of Norway who, together, invested 40 per cent in the initial surveys and exploration attempts. Petro Vietnam holds a five per cent stake which was provided free as part of a deal between Vietnamese and Indian governments.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
