ONGC Videsh Limited ::. The International Petroleum Company of India

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Vietnam

Block 06.1 :

Block 06.1 is an offshore Block located 370 km south–east of Vung Tau on the southern Vietnamese coast with an area of 955 sq km. The exploration License for Block 06.1 was acquired by your Company in 1988. After subsequent assignments and transfers of PI between the parties to Block 06.1 and Petro Vietnam, the present holdings of PIs with effect from 17th October 2011 are ONGC Videsh 45%, TNK Vietnam B.V. 35% (Operator) and Petro Vietnam 20%. Lan Tay field in the Block has been developed and the field started commercial production in January, 2003. Your Company’s share of production from the project was 2.023 BCM of gas and 0.036 MMT of condensate during 2011-12 as compared to 2.249 BCM of gas and 0.038 MMT of condensate during 2010-11. Lan Do field in the Block is under development with first gas expected in October 2012. Wells Lan Do-2P and Lan Do-1P have been drilled and completed between 14th January, 2012 to 18th April, 2012. Presently, subsea construction works are in progress and first gas from Lan Do field is expected in October 2012. Your Company’s share of the development expenditure in the block was about USD 342.78 million till 31st March, 2012.

Block 127 :

Block 127 is an offshore deepwater Block, located at water depth of more than 400 meters with 9,246 sq km area in Vietnam. The PSC for the Block was signed on 24th May, 2006. OVL holds 100% PI in the Block with Operatorship. OVL has acquired 1,150 sq km 3D seismic data in the Block and the interpretation of the seismic data has been completed. Location for drilling of exploration well was identified and the well was drilled in July 2009 to a depth of 1265 mts. As there was no hydrocarbon presence, the Company has decided to relinquish the block to Petrovietnam. The Company has invested approx USD 68 million till 31st March, 2010.

Block 128 :

Block 128 is an offshore deepwater Block, located at water depth of more than 400 metres with 7,058 sq km area in Vietnam. The PSC for the Block was signed on 24th May, 2006 and the extension to the exploration Phase-I for the Block 128 was valid till 15th June, 2012. Your Company holds 100% PI in the Block with Operatorship. 1650 sq km of 3D seismic data was acquired and interpreted in the Block by your Company and location for drilling of exploration well was identified. Drilling was attempted on the location during September 2009; however, the well could not be drilled as the rig had difficulty in anchoring at the location due to hard carbonate sea bottom. Meanwhile, your Company has found solution to the anchoring problem and asked for extension to the exploration phase to undertake review of additional G&G data to find out a viable location for drilling to fulfill the PSC commitment. PetroVietnam (PVN) has suggested ONGC Videsh to continue the exploration programme in the block for additional two years with effect from 16th June, 2012 by revisiting the geological model with the integration of data likely to be available with the assistance from PVN. Till 31st March, 2012, the Company has invested about USD 49.14 million in the Block.

Myanmar Block- A-1, A-3: Your Company holds 17% PI in Blocks A1 and A3 and remaining stakes held by Daewoo (51%), GAIL and KOGAS (8.5% each) and balance 15% with MOGE.Block A-1 extends over an area of 2,129 sq. km of Rakhine Coast in Arakan offshore in north-western Myanmar. Commercial quantity of natural gas has been discovered in the Block in two fields, Shwe and Shwe Phyu. The Shwe and Shwe Phyu field appraisals have been completed by the consortium and the Gas Initially In-Place reserves certified by an independent firm for the Shwe and Shwe Phyu gas fields are 3.83 TCF. Out of 16 wells drilled so far in the block, 9 have been found gas bearing. Block A-3, the adjacent block of Block A-1, covers presently an area of 3,441 sq km with bathymetry up to 1,500 meters in the Rakhine offshore. So far six exploratory wells were drilled in this Block out of which three are gas bearing. Commercial quantity of natural gas has been discovered from Mya Gas Field. The Gas initially in-place reserves certified by an independent firm for the Mya Gas field are 1.52 TCF. A combined Field Development Plan for Blocks A-1 and A-3 comprising of Shwe, Shwe Phyu and Mya gas fields approved by Consortium Partners is expected to be commissioned by May 2013. Your Company’s share of investment in the mid-stream project till 31st March, 2012 was about USD 171.74 million and USD 106.1 million for Block A-1 and A-3 respectively.
Shwe Offshore Pipeline Joint Venture Company (PipeCo-1) The mid-stream project which is a part of the combined development of A-1 and A-3 blocks, is in progress through an EPCIC contract and includes construction of offshore pipeline of 110 Km X 32” from Shwe Offshore Platform to land fall point at Ramree Island, onshore gas terminal, supply base and jetty. The construction of 32” offshore pipeline and supply base and jetty has been completed. The Project is scheduled to be completed by March 2013. Your Company’s share of investment was about USD 39.33 million till 31st March, 2012. Onshore Pipeline Company (PipeCo-2) Your Company has participation in the Onshore Gas Pipeline Transportation project through a joint venture company South-East Asia Gas Pipeline Company Limited (SEAGP) registered in Hong Kong on 25th June 2010, in which the stake of your Company is 8.347%. The shareholding of other partners is CNPC, China- 50.9%, Daewoo- 25.041%, MOGE, Myanmar 7.365%, GAIL and KOGAS 4.1735% each. The joint company will lay an on-land pipeline of 793 Km X 40” from land fall point at Ramree Island to Ruilli at Myanmar-China border. To achieve the first gas from Shwe Gas Development Project in mid-2013, the onshore pipeline project is scheduled to be completed by March 2013. Out of the 5 EPC sections, 2 EPC sections are nearing completion and work on other 3 EPC sections is progressing. Out of the 6 HDD projects, 3 have been completed and work on other 3 HDD projects is progressing. Your Company’s share of investment in the project till 31st March, 2012 was about USD 43.07 million. Your Company’s share in the Combined Development of Blocks A-1 and A-3 including Offshore Mid-stream project and Onshore Gas Transportation pipeline is estimated at about USD 880.61 million. Blocks AD-2, AD-3 and AD-9 : OVL acquired three offshore deepwater exploration Blocks i.e. AD-2, AD-3 and AD-9 on 23rd September, 2007 in Myanmar. OVL is the operator with 100% PI in all the three Blocks. The Blocks have been awarded on the basis of mutual understanding and cooperation between India and Myanmar in the hydrocarbon sector. The blocks AD-2, AD-3 and AD-9 extend over an area of 8,100 sq km, 9,900 sq km and 7,800 sq km respectively with water depths ranging from 1,500 to 3,000 meters in the Rakhine Coast in Myanmar. The exploration period spread over four phases extends to 5 years for AD-2; and 7 years for AD-3 and AD-9. 2D Seismic and G-M data acquisition and processing have been completed. During the year, the Company completed the reprocessing of 2,677 LKM of 2D data and made a complete reassessment of hydrocarbon potential of these blocks. The blocks are found to be high risk with uncertain rewards and after due consideration the Company has relinquished the Blocks at the end of the First Exploration Period in case of AD-2 and after Study Period in blocks AD-3 and AD-9 which ended on 22nd December, 2010. The Company has written off total amount of USD 24.01 million in these blocks.

Russia Sakhalin-I : Sakhalin-1 is a large oil and gas field in Far East offshore in Russia, spread over an area of approx. 1,146 sq km. Your Company acquired stake in the field in July, 2001. Your Company holds 20% PI in the field with Exxon holding 30% PI as Operator; Sodeco, a consortium of Japanese companies holding 30% and balance 20% PI held by Rosneft, the Russian National Oil Company (NOC). Your Company’s investment in the field is within the maximum net cash sink for investment approved at USD 1,556 million (excluding carry finance). The project includes three offshore fields: Chayvo, Odoptu, and Arkutun Dagi. The first phase of Sakhalin-1 of Chayvo field has been developed. Production started in October, 2005. Odoptu first stage production started in September, 2010. Development of Arkutun Dagi is in progress and first oil is expected to be produced in third quarter of 2014. During 2011-12, your Company’s share of production from the project was 1.498 MMT of oil and 0.494 BCM during 2011-12 as compared to 1.474 MMT of oil and 0.415 BCM of gas during 2010-11.

Imperial Energy

Your Company acquired Imperial Energy Corporation Plc., an independent upstream oil Exploration and Production Company having its main activities in the Tomsk region of Western Siberia, Russia on 13th January, 2009 at a total cost of USD 2.1 billion. Imperial’s interests currently comprise of nine blocks in the Tomsk region i.e. Block 69, 70-1, 70-2, 70-3, 77, 80, 85-1, 85-2 and 86 with a total licensed area of approximately 13,500 square kilometres with 14 licenses. The Production licenses were granted to the Company during 2005 to 2010 and are valid till 2027 to 2031. As on 1st April, 2012, OVL’s share of 2P reserves in the project was 110.122 MTOE (O+OEG).

The post acquisition development activities of Imperial Energy included drilling of 72 development wells and construction of facilities increasing the production level to above 15,000 bopd in April 2012. On the exploratory front, a total of 28 exploratory/ appraisal wells have been drilled from 2009 to April 2012. Further 270 sq. km of 3D seismic data and 2536 Lkm of 2D seismic data were acquired, processed and interpreted. The processing & interpretation of 2D and 3D seismic data acquired during 2011 and 2012 are currently in progress. The exploration efforts have shown positive results. Based on the exploration / development efforts put forward so far, Imperial Energy has primarily focussed on exploiting from Upper Jurassic formation with relative good reservoir characteristics. Concurrently, Imperial is consolidating all the data generated so far to develop its strategy for exploitation of oil from its tight sand reservoirs as next course of action, for which the job of scouting and identification of a suitable technologies is in hand. A provision for impairment of ` 1,953 Crore has been made for this project as the asset is performing lower as compared to the estimates and the ‘value in use’ computed for the asset as on 31st March, 2012 was lower than its carrying value. During the year 2011-12, production of Imperial Energy was 0.771 MMT of oil as compared to 0.770 MMT during 2010-11.

Satpayev Project, Kazakhstan

Your Company signed agreements with KazMunaiGas (KMG), the National Oil Company of Kazakhstan for acquisition of 25% participating interest in Satpayev exploration block on 16th April, 2011 at Astana, Kazakhstan in the presence of Hon’ble Prime Minister of India and the President of Kazakhstan. This transaction marks the entry of your Company in hydrocarbon rich Kazakhstan. Satpayev exploration block, located in the Kazakhstan sector of the Caspian Sea, covers an area of 1482 sq.km at a water depth of 6-8 mts. Satpayev Block is situated in close proximity to major discoveries in the North Caspian Sea. Your Company carries KMG for its 75% share and therefore bear the entire 100% expenditure during the exploration and appraisal phase of the Project. Acquisition, Processing and Interpretation of 1200 LKM of 2D Seismic data have already been completed and location for drilling has been identified. Your Company’s share of investment in the project was about USD 113.93 million which includes carry amount of about USD 11.16 million till 31st March, 2012.

Iraq Exploration Block-8 : Your Company is the sole licensee of Block-8, a large on-land exploration Block in Western Desert, Iraq spread over 1.5 sq km. The Exploration & Development Contract (EDC) for the Block was signed on 28th November, 2000. The contract was ratified by the Government of Iraq on 22nd April, 2001 and was effective from 15th May 2001. Since then, the work relating to archival, reprocessing and interpretation of the existing seismic data has been completed. However, your Company had to notify the force majeure situation to the Ministry of Oil, Iraq in April, 2003 due to prevailing conditions in Iraq. In 2008, your Company was informed that Government of Iraq had decided to re-negotiate the Block-8 contract in line with the provisions of the new oil and gas law which was expected to be promulgated soon. Re-negotiation is yet to commence. Your company is following up the matter with Iraqian authorities. The Company has invested about USD 2 Million till 31st March, 2012.

Syria Al Furat (4 PSA) : The project is owned by Himalaya Energy Syria B.V. (HESBV), a Joint Venture Company of ONGC Nile Ganga B. V., a wholly owned subsidiary of your Company and Fulin Investments Sarl, a subsidiary of China National Petroleum Company International (CNPCI), holding 50% shares each. The fields are operated by Al Furat Petroleum Company (AFPC), jointly owned by Syrian Petroleum Company (50%), the National Oil Company of Syria, Shell Syria Petroleum Development Co. (31.25%) and HESBV (18.75%). Due to geo-political development in gulf countries, European Union (EU) imposed oil trade sanctions on Syria in September, 2011. The EU sanctions were specifically targeted at crude oil exports making vessel availability, associated insurance and payment extremely difficult. EU further imposed enhanced sanctions to Syria enhanced its sanction on 1st December, 2011 and included AFPC and GPC in the list of sanctioned Syrian entities. Shell has issued a letter informing AFPC and Syrian authorities that the present situation of preventing the contractor from discharging their obligation under PSC Contract as arisen due to EU sanctions and was like a Force Majeure situation for foreign partners. Shell has withdrawn all its expatriates’ from field operations and Damascus office work. The national employees were running the AFPC operations at fields and no details are being shared with the partners. In the absence of details, the accounting of revenue and expenditure has not been carried out from December, 2011 till March, 2012. Your Company’s share in the oil and OEG production was 0.503 MMTOE during 2011-12 as compared to 0.662 MMT during 2010-11. If the operations had been normal, your Company’s share of production in the asset would be higher by 0.069 MMT during 2011-12.
Block-XXIV : The Contract for Exploration, Development and Production of Petroleum for the Block XXIV, Syria was signed on 15th January, 2004 with effective date from 29th May, 2004. Your Company holds 60% PI in the Block with IPR Mediterranean Exploration Ltd. (Operator) and Tri Ocean Mediterranean holding PI of 25% and 15% respectively. The exploration phase for the block has expired on 28th September, 2011. The consortium over achieved the physical Work Commitment by drilling a total of 14 wells in the Block in this phase. During the FY’12, the consortium drilled 7 exploratory wells, out of which 3 wells flowed oil/gas and 1 well showed presence of hydrocarbon. Extended production testing of three exploratory wells in Abu Khashab area was carried out to acquire reservoir data and also to know its production potential. 1 development well was also drilled during the current FY’12. Based on the exploration results, the Government of Syria granted development rights for additional areas of three formations in Abu Khashab area. Presently, Plan of Development (PoD) of Abu Khashab area is being prepared by the Operator. Further, the consortium’s request for granting of development right for Romman Area is under active considerations of the Syrian Authorities. Meanwhile, the Operator has invoked ‘Force Majeure’ in the Block w.e.f. 30th April, 2012 citing effects of US sanctions and deteriorating law and order situation in the operational areas. Rashid Field has been under extended production testing with an average rate of production of 180 BOPD. However, due to worsening law and order situation in and around Rashid field, the facilities have been shut down w.e.f. 13th June, 2012. Your Company’s share of oil production from the project was 0.010 MMT for 2011-12 compared to 0.002 MMT for the year 2010-11. The Company has invested about USD 70.17 Million till 31st March, 2012, on cash sink basis, in the block.

Libya Exploration Block NC-189 : OVL acquired a 49% stake in the on land Block NC-189 measuring 2,088 sq. km located in west-central part of the Sirte Basin in Libya in June, 2003. Turkish Petroleum Overseas Company (TPOC), a subsidiary of National Oil Company of Turkey, held the remaining 51% PI with operatorship in the block. Three exploratory wells were drilled in this Block and all the wells were plugged and abandoned as dry wells. The Company decided to relinquish the Block at the end of the exploration period on 11th December, 2009. The well B1-NC-189 could not be drilled to the target depth of 16000 feet and NOC, Libya has not accepted the well as a completed well. The Consortium has paid USD 4.00 Million in which the Company’s share at 49% is USD 1.96 million towards the minimum commitment amount for the well. Due to unrest in Libya, the formal communication from NOC towards relinquishment of the Block is still awaited. Block 81-1 : Block 81-1 measuring 1,809 sq km is an onshore exploration Block located in Ghadames Basin in south-west Libya. The Exploration and Production Sharing Agreement (EPSA) for the Block is effective from 10th December 2005. OVL holds 100% PI with operatorship in the Block. The acquisition, processing and interpretation of 811 LKM 2D and 502 Sq. Km. 3D seismic data have been completed. The Interpretation of Geo scientific data of Block 81-1, Libya was carried out at G & G centre of OVL at New Delhi. Based on the study, some leads were identified but unfortunately none could be matured for drilling. On the recommendation of Management Committee, the seismic data was reprocessed at GEOPIC, ONGC Dehradun and the analysis brought out three small subtle features in 3D area and a marginal prospect in 2 D area. In spite of best efforts a drillable prospect did not emerge due to high risk and marginal nature of the prospects. The Company has relinquished the Block at the end of the first phase of exploration which ended on 9th December, 2010. Payment of USD 4 Million was made in FY 2010-11 towards the Company’s unfulfilled commitment of drilling one well in the Block to the National Oil Corporation (NOC) of Libya. The relinquishment formalities of the block have been completed and the formal letter of relinquishment is awaited from NOC, Libya. Contract Area 43 : Participating Companies and their Shares :OVL- 100% Your Company acquired Contract Area 43 located in Cyrenaica offshore basin in the Mediterranean Sea under an Exploration and Production Sharing Agreement (EPSA) effective from 17th April, 2007. Contract Area 43 consists of four blocks spread over an area of 7,449 Sq. Km. The block boundaries extend from the coastline to a water depth of about 2200 meters. Your Company holds 100% PI in Contract Area 43 with operatorship. The acquisition and processing of 1011 LKM 2D and 4000 Sq. Km. 3D seismic data have been completed. Finalization of interpretation report of Geo scientific data is in progress at G&G centre of your Company in New Delhi. Due to civil unrest in Libya, notice for Force Majeure was served to NOC, Libya w.e.f. 26th February 2011 and the operations at Libya were suspended. However after improvement of civil unrest and safety situation at Libya, the Force Majeure notice has been revoked and the operations have been resumed w.e.f. 1st June, 2012. Your Company has invested about USD 39.22 million in Contract Area 43 till 31st March, 2012.

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Nigeria Block OPL 279 : OPL 279 is a deepwater offshore exploration Block in Nigeria with an area of 1,125 sq km. The effective date of the PSC was 23rd February, 2007. Your Company’s Joint Venture Company ONGC Mittal Energy Limited (OMEL) through its wholly owned subsidiary company OMEL Exploration & Production Nigeria Ltd. (operator) held 45.5% PI in the Block. Other partners in the Block are EMO, a local Nigerian company with 40% PI and TOTAL with 14.5% PI. The Phase I of exploration expired on 22nd February 2012. All MWP commitments under exploration phase I in the Block have been fulfilled including acquisition of 534 sq km of 3D seismic data and drilling of well Kuyere-1 in Jan-Feb., 2010 with discovery of hydrocarbons in three pay zones. Based on the post-drill analysis of G&G data, some prospects were identified in deeper stratigraphic levels of this block. However the identified prospects do not offer a standalone discovery case for any viable commercial development. A notice of relinquishment was accordingly issued to NNPC on 21st November 2011. OMEL’s share of investment, including the carry obligations to EMO, till 31st March, 2012 was about USD 156 million. Block OPL 285 :
OPL 285 is a deepwater offshore exploration Block in Nigeria with an area of 1,167 sq km. The effective date of the PSC was 23rd February, 2007. Currently, OMEL through its wholly owned subsidiary company OMEL Energy Nigeria Ltd., as operator, holds 64.33% PI in the Block. Other partners in the Block are EMO, a local Nigerian company with 10% PI and TOTAL with 25.67% PI. As per terms of the agreement, EMO is carried by other participants in their respective share of participation. The committed MWP of the block for the first phase of exploration has been completed with acquisition of 524 sq. km of 3D data and drilling of one well, Opueyi-1 in August-September, 2010. Two sub-commercial hydrocarbon zones are encountered in the well. Based on post drilling analysis, review of G&G data and the commitment to the downstream project attached to the PSC, the operator, decided to enter the second phase of exploration period if the regulator NNPC grants the waiver from the downstream project commitment. A request letter was sent to NNPC in this regard on 24th November, 2011. No response has been received from NNPC on waiver request so far. OMEL’s share of investment, including the carry obligations to EMO, till 31st March, 2012 was about USD 79 million. .
Block-2, Nigeria-São Tomé & Principe, JDZ Block-2 is a deep water exploration Block located in Nigeria-São Tomé & Principe Joint Development Zone (JDZ) with an area of approx. 1,034 sq km. ONGC Narmada Limited (ONL), Company’s 100% subsidiary incorporated in Nigeria, holds 13.5% PI in the Block. Other partners in the Block include Sinopec (28.67% PI), Addex Petroleum (14.33% PI), ERHC Energy Inc. (22% PI), Equator Exploration (9% PI), Amber (5% PI), Foby (5% PI) and A & Hatman (2.5% PI) with Sinopec as the operator. Operator has acquired license of 3D seismic data and interpreted the data. Based on the same, a well was drilled in 2009. Though the well showed presence of hydrocarbons, the volumes were inadequate to warrant a commercial development. OVL has communicated its intention of not continuing on the block to the Operator and Joint Development Authority (JDA) of Joint Development Zone Nigeria-São Tomé & Principe as the development of the project is not commercially viable. ONL’s share of investment, inclusive of the carry obligations to A & Hatman, till March, 2011 was approx. USD 25 million, which has been written off.
Sudan Greater Nile Oil Project (GNOP) 1, 2 & 4 : Your Company holds 25% PI in the GNOP through its wholly owned subsidiary ONGC Nile Ganga BV (ONGBV) which was acquired on 12th March, 2003. Other partners in this project are CNPC (40% PI), Petronas of Malaysian (30% PI) and Sudapet of Sudan (5% PI). GNOP consisted of the upstream assets of on-land Block 1, 2 & 4 spread over 49,500 sq km in the Muglad Basin, located about 700 km South-West of the capital city of Khartoum in Sudan. GNOP has downstream facility of 1504-Km 28”crude oil pipeline from the oil field in Heglig to Port Sudan at Red Sea. As per “Settlement Agreement” between the Government of Sudan (GOS) and Foreign Partners (FP’s) concluded in December 2010, 70% of the ownership in the Sudan Crude Oil Transportation System (SCOTS) got transferred to the GOS effective from 1st October 2006. Your Company’s PI in downstream pipeline is 11.25% effective from 1st October 2006 after transfer of 55% of its ownership in the downstream pipeline as against 75.36% ceded by CNPC and Petronas. The pipeline continues to be managed by GNOP. The project is jointly operated by all partners through a joint operating company Greater Nile Petroleum Operating Company (GNPOC), registered in Mauritius. Upon secession of South Sudan from Republic of Sudan (ROS) effective from 9th July 2011, while majority production and reserves are situated in Republic of South Sudan (RSS), with a few fields straddled the boundaries of ROS and RSS, the major processing facilities and crude oil transportation system along with export terminal are situated in ROS. Post secession, the GOS share of total production is not sufficient to meet its local refinery requirements. Since August 2011, the GOS has been asking to lift/purchase Foreign Partners’ (FPs) share of crude oil for the local refinery feedstock requirements. During October, 2011, the FPs sold 0.8 million barrels of oil to GOS. Further in respect of the directive from GOS to take FPs share of oil to refineries, about 3.3 million barrels of FPs’ crude oil have been taken by GOS for the local refineries during the period January to June, 2012. However, payment has not been received fully from GOS for purchase of FPs’ oil for local refinery requirements. Your Company share of estimated dues from GOS as on 30th June 2012 was about USD 112 million. Consequent upon the separation of RSS, share of Sudapet stands transferred to Nilepet, the National Oil Company of Republic of South Sudan as per the Decree issued by the President of RSS on 8th November, 2011. Partners of Block 1, 2 & 4 along with Nilepet executed a Transition Agreement with GOSS on 13th January 2012 for the continuation of rights of petroleum exploration and exploitation for contract area of Block 1, 2 & 4 in RSS . RSS being a land locked country, is dependent on ROS’s pipeline system for evacuation of crude oil for export through Port Sudan and continued to utilise the existing pipeline system till December, 2011. Post-secession, both governments had been engaged in the process of negotiations on various issues. Pending settlement of unresolved geopolitical and commercial issues between the two countries, GOSS enforced shut down of all oil field operations effective from 21st January 2012. The production from Blocks 1, 2 & 4 in RSS has been shutdown as per decision from GOSS. However, GNPOC from ROS continued to produce 52,000 barrels of oil per day till 31st March, 2012 from areas in ROS. A new Joint Operating Company (JOC), Greater Pioneer Operating Company (GPOC) has been registered in Mauritius for petroleum operations of Block 1, 2 & 4 in RSS. Your Company holds 25% equity share in GPOC through its wholly owned subsidiary ONGC Nile Ganga B.V. and the project is jointly operated by all partners. On 10th April, 2012, crude oil pumping from the Central Processing Facility (CPF) in Heglig to Marine Terminal, Port Sudan had to be stopped due to bombing and shelling in the vicinity of the base camp area. The CPF Heglig was subsequently reported to be in the occupation of RSS forces till 20th April 2012. Due to the intrusion, there have been damages in the oil facilities in Heglig. The repair work has started and the production restored partially from 1st May, 2012; average production during June, 2012 was about 44,000 barrels of oil per day.Your Company’s share in oil production from GNPOC, ROS and RSS was 1.324 MMT during 2011-12 as compared to 1.801 MMT during 2010-11. If the operations had been normal, your Company’s share of production in the asset would be higher by 0.219 MMT during 2011-12.
Block 5A, : Block 5A is located in the Muglad basin and spread over an area of about 20,917 sq km. Your Company acquired stake in the Block from OMV of Austria on 12th May, 2004 and holds 24.125% PI along with Petronas of Malaysia (67.875% PI) and Sudapet (8% PI). The Block was operated by White Nile Petroleum Operating Company (WNPOC), a consortium of Petronas and Sudapet. Since 9th July 2011, cessation of South Sudan from Republic of Sudan (ROS), the entire block area is located in the territory of the Republic of South Sudan (ROSS). Subsequently, the PI of Sudapet has been transferred to Nilepet, the National Oil Company of ROSS as per the Presidential Decree issued on 8th November, 2011. The Company along with Petronas and Nilepet has signed a Transition Agreement on 13th January 2012 with the Government of RSS for the continuation of its right for petroleum exploration and exploitation in Block 5A. The partners of Block 5A, including your Company, have incorporated a new operating company SUDD Petroleum Operating Co. Ltd. (SPOC) registered in Mauritius on 7th March 2012. The block will now be jointly operated by all partners. Your Company’s share of oil production from the project was 0.174 MMT during 2011-12 as compared to 0.226 MMT during 2010-11. If the operations had been normal, your Company’s share of production in the asset would be higher by 0.046 MMT during 2011-12.
Khartoum-Port Sudan Pipeline Project, Sudan: Your Company (90% PI) along with Oil India Limited (10% PI) had financed & constructed a 12”, 741 km multi-product pipeline from Khartoum refinery to Port Sudan at a base lump sum price of USD 194 million. The pipeline was handed over to Government of Sudan (GOS) in October, 2005. The lease amount is payable to the Company in 18 equal half yearly installments effective from December 2005. Payment of eleven half-yearly installments due till December, 2010 has been received by your Company from the GOS. However, the 12th, 13th and 14th installments due on 30th June 2011, 30th December 2011 and 30th June, 2012 respectively are yet to be released by the GOS. Your Company has been following up for the realization of the amount from GOS at various levels. Dodsal, the EPC contractor has invoked arbitration against your Company staking claim of USD 28.70 million plus interest and cost towards alleged additional work carried out in the project. The arbitral proceedings in the matter between your Company and Dodsal are under adjudication.
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South Sudan: Greater Pioneer Operating Company (GPOC), The average production from Block 1, 2 & 4 operated by GNPOC, Sudan during April 2011 to June 2011 was 133,089 bopd before partition of the country. South Sudan was formed as a new sovereign country in July 2011 which is land locked. The fields of GNPOC straddle across North Sudan and South Sudan and about 60% of production comes from South Sudan fields. The fields of Block 5A are now entirely in South Sudan. All Processing facilities, Crude Oil Pipeline and Export Facilities are situated in North Sudan. The production of GNPOC started falling gradually due to various reasons. Productivity of South Sudan fields of GNPOC was affected due to lack of skilled manpower and support services. Dispute has arisen over the transit fee for transporting South Sudan oil through Heglig-Port Khartoum pipeline and export. Due to failure of negotiation for transit fee between the two countries, Govt. of South Sudan ordered shutdown of oil production from GNPOC-South fields and Block-5A on 23rd Jan, 2012 which resulted in fall of production of GNPOC to about 52,000 bopd and production from Block 5A to zero. Partners of Blocks 1, 2 & 4 executed a ‘Transition Agreement’ (TA) with the Govt. of South Sudan on 13th January, 2012 as part of new Exploration and Production Sharing Agreement (EPSA) for contract area of Blocks 1, 2 & 4 falling in South Sudan. P.I. of “Sudapet” has been transferred to “Nilepet”, the National Oil Company of South Sudan as per the Presidential Decree issued dated 8th Nov. 2011, considering the block as a sovereign property of South Sudan. Subsequently, a new JOC for petroleum operations in South Sudan, for Blocks 1, 2 & 4 has been registered in Mauritius in the name of ‘Greater Pioneer Operating Company’ (GPOC). The shareholding of ONG BV in GPOC is 25% in accordance with P.I. in the asset under joint operatorship with other partners. Presently the straddled Blocks 1, 2 & 4 in Sudan and South Sudan are being operated by JOCs named, GNPOC and GPOC respectively. Block 5A, South Sudan Block 5A is located in the Muglad basin and spread over an area of about 20,917 sq km. OVL acquired stake in the Block from OMV Aktiengesellschaft, Austria on 12th May, 2004 and holds 24.125% PI along with Malaysian National Oil Company, “Petronas” (67.875% PI) and National Oil Company of Sudan, “Sudapet” (8% PI). After partition of South Sudan from Sudan in July 2011, the entire block is located under the territory of the Republic of South Sudan. Subsequently, the P.I. of “Sudapet” has been transferred to “Nilepet”, the National Oil Company of South Sudan as per the Presidential Decree issued on 8th Nov. 2011, considering the block as a sovereign property of South Sudan. The partners of Block 5A have jointly incorporated a new company “SUDD Petroleum Operating Co. Ltd.” (SPOC) in Mauritius on 7th March 2012. The block is now jointly operated by all partners with holdings as per the participating interests in South Sudan which was erstwhile being operated in the name of “White Nile Operating Company” (WNPOC), a consortium of Petronas and Sudapet in Sudan. The Block has been put on production since June 2006 from Thar Jath, Mala and mala Satellite fields. OVL’s share of oil production from the project was 0.174 MMT for 2011-12 as compared to 0.226 MMT for the year 2010-11. The Government of South Sudan has enforced Shut Down of all oil fields operations w.e.f 23rd January, 2012 including production from this Block.

Brazil

Block BC-10 :

Block BC-10 is a deepwater offshore Block located in the Campos Basin approximately 120 km southwest from the city of Vitoria off the coast of Brazil with a water depth of around 1800 meters spread over 600 sq km. Your Company holds 15% PI in the project. Other partners in the Block are Shell with 50% PI as operator and Petrobras with 35% PI. Phase-1 development of the Block was completed using sub-sea wells which connect via sub-sea manifolds, flowlines, and risers to a Floating Production, Storage and Offloading Vessel (FPSO). Drilling of 11 wells (10 producers and 1 gas injector) is operational; oil production commenced on 12th July 2009. The Phase II development would involve drilling of seven producer wells and four water injector wells. The Batch drilling of wells has started in April 2012. The Subsea & Pipeline installation work is scheduled in October 2012 and first Oil is expected in October 2013. Your Company’s share of oil and gas production was 0.450 MMT and 0.015 BCM respectively during 2011-12 as compared to oil production of 0.573 MMT and gas production of 0.013 BCM respectively during 2010-11.

Blocks BM-SEAL-4 & BM-BAR-1 :

Your Company through its indirect wholly owned subsidiary OCL, acquired PI in exploration blocks BM-SEAL-4 and BM-BAR-1 in Brazil in August 2008. Your Company holds 25% PI in each of these blocks with Petrobras (operator) holding remaining 75%. Drilling of an exploratory well is currently in progress in block BM-SEAL-4. In Block BM-BAR-1, two exploratory wells have been drilled without success for which your Company has conveyed its decision to relinquish its share in the venture. Your Company’s share of investment till 31st March, 2012 was about USD 7 million for Block BM-SEAL-4 and about USD 98 million for BM-BAR-1.
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Block BM-ES-42 BM-S-73 :

Your Company through its indirect wholly owned subsidiary OCL, holds 100% PI in the deep water offshore Block BM-ES-42 in Brazil. The block spreads over an area of 725 sq km with water depths of around 1,500 meters. Seismic data acquisition, processing and G&G studies of PSTM & PSDM data have been completed. As your Company could not farm out up to 50% PI to mitigate exploration risk in the block as per Board’s decision, the block has been surrendered at the end of 1st exploration phase i.e., 11th March, 2012). The Company has invested about USD 47 million till 31st March 2012.

Your Company through its indirect wholly owned subsidiary ONGC Campos Ltda (OCL) holds 43.5% PI and is the Operator in offshore Block BM-S-73, Brazil. Petrobras and Ecopetrol are the other partners in the block having 43.5% and 13% PI respectively. The block spreads over an area of 160 sq km with water depths of around 200 meters. 3D Seismic data acquisition, processing, G&G study and drilling of one committed well have been completed for the fulfilment of MWP of 1st Exploration phase. As the exploratory well has been declared dry, the block has been surrendered in February 2012. Your Company’s share of investment was about USD 89 million till 31st March 2012. There is dispute with the partners against the rig hire charges for stand-by period and penalties imposed by Agencia Nacional de Petroleo (ANP), the Brazilian regulatory authority, for about USD 82 million, which is under discussion with partners. Further, there is potential liability of about USD 27.5 million on account of non-fulfillment of Local Content (LC), for which waiver from ANP has been sought.

Block S-74

Your Company through its indirect wholly owned subsidiary OCL, holds 43.5% PI in Brazil offshore Block BM-S-74 covering an area of 165.4 sq km. Other partners in the block are Petrobras (operator) and Ecopetrol with 43.5% and 13% PI respectively. Seismic data acquisition, processing and G&G studies and drilling of 1 commitment well have been completed. The well has been declared dry and hence abandoned. The consortium has decided to relinquish the block. Your Company’s share of investment in the block till 31st March, 2012 was about USD 15 million.

Colombia Mansarovar Energy Colombia Limited (MECL) : Mansarovar Energy Colombia Limited (MECL), Colombia is a 50:50 joint venture of your Company and Sinopec of China. Effective 1st April, 2006, MECL's assets constitute a 100% interest in Velasquez fee mineral property and a 50% interest in the Nare Association contracts where the Colombian national oil company, Ecopetrol holds the remaining 50%. MECL also owns 100% of the 189-km Velasquez-Galan pipeline, connecting the Velasquez property to Ecopetrol's Barrancabermeja refinery. Your Company’s share of oil production from MECL was 0.561 MMT during 2011-12 as compared to 0.468 MMT during 2010-11.
Blocks RC-8, RC-9, RC-10: Your Company acquired exploration blocks RC–8, RC-9 and RC-10 in offshore Colombia, effective date of concession contracts being 30th November, 2007. Currently Blocks are running in Phase-II, expiring on 29th November, 2013. The current area of the blocks RC–8, RC-9 and RC-10 after entering into phase-II are 1,385 sq km, 1,060 sq km and 1,340 sq km respectively with water depths of 70 to 1,500 meters in offshore Colombia. In Block RC-8, your Company as Operator holds 40% PI with Ecopetrol and Petrobras holding 40% PI and 20% PI respectively. In Blocks RC-9 and RC-10, your Company and Ecopetrol hold 50% PI each. Your Company is Operator in RC-10 Block while Ecopetrol is Operator in RC-9 Block. All the three Blocks have completed three years of exploration Phase-I on 29th November, 2010, successfully completing minimum committed work of the Blocks. Your Company’s share of investment was about USD 2.3 million in Block RC-8, USD 5.43 million in Block RC-9 and about USD 3.47 million in Block RC-10 till 31st March, 2012. Blocks SSJN-7 & CPO-5 : Your Company participated in the Bidding Round 2008 in Colombia and was awarded two on land Blocks i.e. SSJN-7 with 50% PI and CPO-5 with 100% PI. Later in the year 2010, 30% PI in CPO-5 Block was divested to Petrodorado. Block CPO-5 is operated by your Company with 70% PI and the Block SSJN-7 is operated by Pacific Stratus Energy, Colombia with 50% PI. The concession contracts for the Blocks SSJN-7 and CPO-5 were signed on 24th December, 2008 and 26th December, 2008 respectively. Two exploratory locations have been released for drilling in Block CPO 5 under Phase-1. In Block SSJN-7, acquisition & processing of 2D seismic data in part of the identified area has been concluded. The Phase-I of exploration of these blocks expired in June, 2012. Due to delay in grant of environment permits and approvals from concerned authorities, Operator of SSJN-7 and ONGC Videsh in case of block CPO-5 have sought extension to the running exploration period. Your Company’s share of investment was about USD 5.81 million for Block SSJN-7 and about USD 18.39 million for the Block CPO-5 till 31st March, 2012.

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Cuba Block N-25, 26, 27, 28, 29 & N-36 : Blocks 25, 26, 27, 28, 29 and 36 are deep water offshore exploration Blocks located in Cuba’s Exclusive Economic Zone (EEZ) for which the agreement for acquisition of 30% PI in the Blocks from Repsol-YPF of Spain was signed on 23rd May, 2006. The other partners in the Blocks are Repsol-YPF with 40% PI as operator and Statoil with 30% PI. The Consortium entered into extended exploration sub period-IV with commitment of drilling of two exploration wells after relinquishing 5,962 sq km area of the Blocks. The consortium now holds 5,269 sq.km of area. The drilling of first of the two commitment wells has been completed on 11th May, 2012 without any oil and gas find and the well was declared dry. The Company’s share of cost of drilling the first exploratory well till 31st March 2012 was about USD 31.91 million. Data collected from the well is under analysis to decide the future course of action. Your Company’s share of investment in these blocks was about USD 49.58 million till 31st March, 2012 . Block N-34 & N-35 :
Blocks 34 and 35 are deep water offshore exploration Blocks located in Cuba’s Exclusive Economic Zone (EEZ) for which the PSC was signed on 10th September, 2006. Your Company holds 100% PI in the Blocks as the Operator. Acquisition, processing and interpretation of 2D and 3D seismic data have been completed. The block area has increased from 4300 to 4800 sq km after annexation of additional 500 sq km of area. The exploration period would expire on 12th September 2012. Your Company is watching the post-drilling results/analysis in the neighbouring blocks to firm up its future plans for the blocks. The Company has invested about USD 46.50 million in the blocks till 31st March, 2012.
Venezuela San Cristobal Project : Your Company signed an agreement with Corporación Venezolana del Petróleo S.A. (CVP), a subsidiary of PDVSA on 8th April, 2008 and acquired 40% PI in San Cristobal Project, Venezuela. San Cristobal project covers an area of 160.18 Sq. Km in the Zuata Subdivision of proliferous Orinoco Heavy Oil belt in Venezuela. The project is operated jointly by your Company and the PDVSA. The JV Company has been named “Petrolera IndoVenezolana SA” (PIVSA). CVP, a subsidiary of PDVSA holds 60% equity in JVC and Your Company holds 40% equity through ONGC Nile Ganga (San Cristobal) BV, a wholly owned subsidiary of ONGC Nile Ganga B.V. Though your Company received its dividend of USD 56.224 million for 2008, dividend for 2009 and 2010 amounting to USD 72.34 million and USD 83.2 million respectively remained unpaid due to cash flow difficulties being faced by PDVSA/CVP, which is being followed-up. In April 2011, new special contribution (windfall tax) on extraordinary/exorbitant prices had been imposed in Venezuela at sliding scales from 20% to 95% depending upon Venezuelan oil basket prices, Your Company’s share of windfall tax levied by the host Government during the year was USD 168.89 million, having downward impact on profit of your Company . During 2011-12, your Company’s share of oil production was 0.894 MMT as compared to 0.757 MMT during 2010-11 and current production is approx. 40000 bopd. Your Company’s share of investment was about USD 191 million till 31st March, 2012 in the project.
Carabobo-1 Project Your Company along Indian Oil Corporation Limited (IOCL), Oil India Limited (OIL), Repsol YPF (Repsol) and Petroliam Nasional Berhad (PETRONAS) (collectively, the “Consortium”), was awarded by the Government of the Bolivarian Republic of Venezuela 40% ownership interest in an “Empresa Mixta” (or “Mixed Company") which will develop the Carabobo 1 North (203 sq.km.) and Carabobo 1 Central (180 sq.km.) blocks located in the Orinoco Heavy Oil Belt in eastern Venezuela. Your Company holds 11% PI in Carabobo-I project through its subsidiary Carabobo One AB. Repsol and Petronas holds 11% PI each and IOCL and OIL holds 3.5% PI each in the project. The Corporación Venezolana del Petróleo (“CVP”), a subsidiary of Petróleos de Venezuela S.A. (“PDVSA”), Venezuela's state oil company, holds the remaining 60% equity interest. The Mixed Company was incorporated as Petro Carabobo S.A. (PCB). The project has estimated Oil in Place of about 27 Billion barrels. The Mixed Company would build heavy (8-90 API) oil production facilities, upgrading (320 API) facilities and associated infrastructure for producing extra-heavy crude oil. The upstream production facilities are expected to produce about 400,000 barrels per day of which approximately 200,000 barrels per day will be upgraded into light crude oil in a facility to be located in the Soledad area, Anzoátegui State. The license term is for 25 years with the potential for a further 15 year extension i.e., for a total of 40 years. One Service Company Carabobo Ingenieria Y Construcciones S.A (CICSA) for executing the Jobs under Development plan has been incorporated on 21st January 2011. Four Stratigraphic wells and six slant wells drilled for collection of samples and study of petrophysical properties for drilling development wells for accelerated production of first oil in 2013. Presently, basic engineering & FEED for upgrader and downstream facilities and 3D-Seismic study, civil works for well pads have been awarded and other tendering Processes/approval from PCB & awarding of drilling contract for Development of the Field are in progress.