ONGC Videsh Ltd (OVL) is likely to wind up oil exploration efforts in a Vietnamese oil block in the South China Sea as it has so far been unsuccessful in drilling wells because of hard seabed in the area.
OVL, the overseas arm of state-owned ONGC, said it is pulling out of Block 128 in Vietnamese waters due to ''techno-commercial'' considerations. However, OVL has not yet approached PetroVietnam for permission to stop operations.
It said the Indian authorities are also not very interested in continuing the project as it was not ''economically viable''.
The move, coming at a time when China is asserting its sovereign rights in the South China Sea, will impact on the strategic presence of India in the region.
According to OVL, the "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 seabed. The drilling activity was terminated.''
ONGC Videsh has invested about $46 million till 31 March 2011 in Block 128, an offshore deepwater block located at a water depth of more than 400 metres over a 7,058 sq km area in Vietnam.