Friday, March 21, 2014

MEA asks OVL to reconsider Cuba decision

MEA asks OVL to reconsider Cuba decision

With the US considering easing of sanctions, the Ministry of External
Affairs (MEA) is understood to have approached the Petroleum and Natural
Gas Ministry to impress upon the state-run Oil and Natural Gas
Corporation Videsh Ltd (OVL) to reconsider its decision to surrender the
oil and gas blocks held by it in Cuba.

Sources said MEA had conveyed to the Petroleum Ministry that the assets
were of vital importance and any move to exit would be ill-timed. OVL
has invested approximately $140 million in these blocks but is
withdrawing due to poor prospects. It has interest in 8 offshore oil and
gas blocks in Cuba (2 self-operated and 6 in partnership with Repsol and
Statoil of Norway.

In its communication, MEA has reached out to OVL citing recent
recommendations of a US study group which has sought relaxation of
restrictions imposed by the US administration on companies in oil
exploration activities in Cuba.

According to the MEA communication, the US study group has called for
lifting of sanctions reportedly to ensure prevention of marine oil and
gas disasters that will have severe ecological repercussions in the US
as well. The other reason for easing restrictions is the possibility of
allowing US companies to tap the hydrocarbon prospects available in and
around Cuba. Given the fact that US could change its view on Cuba, the
MEA has asked OVL to re-evaluate its option of withdrawing its
investment in the region.

OVL had long back entered into an agreement with Repsol-YPF of Spain to
acquire 30 per cent participating interest in the deepwater exploration
Blocks 25, 26, 27, 28, 29, 36 and part of Block 35 in Cuba. The blocks
are spread over an area of nearly 12,000 Sq Km in the exclusive economic
zone of Cuba.

Source: MEA asks OVL to reconsider Cuba decision - The Hindu -

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