Indian oil company ONGC Videsh Ltd. (OVL) signed an agreement with Oil Exploration Co. of Iraq on November 28th to explore Block 8 in the western Iraqi desert.
Iraqi Oil Minister Amer Rasheed said that: “We hope with the efficiency and the active participation, they [OVL] will manage to get some oil in the block, not necessarily one oil field but possibly more.”
OVL, a subsidiary of Oil and Natural Gas Corp. (ONGC), had made an offer for the block in 1998, but Iraq asked for a renegotiation of the contract in August.
Block 8, measuring about 8,000 square kms, is considered to have high prospects, due to its close proximity to the Abu Khema oil field, discovered by ONGC in 1974-77. Estimates in 1998 put production capacity for the Abu Khema field at 12,000 b/d of crude.
A company official said that: “It [the contract] allows the OVL to undertake exploration-related activities which do not violate U.N. sanctions.”
Rasheed was in New Delhi with Iraqi Vice President Taha Yassin Ramadan for a five-day visit at the time of the signing of the accord.
Ramadan, the highest-ranking Iraqi official to visit New Delhi in 25 years, is to sign a framework of cooperation with Indian Prime Minister Atal Behari Vajpayee on November 29th, following discussions between the two countries centering on increasing Indian exports to Iraq and also touching on sanctions against the Gulf producer.