OVL miffed at Kazakh co's demand | india | Hindustan Times
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OVL miffed at Kazakh co's demand

OVL is miffed by the demand for a fee by KMG to hold further discussions on the Satpayev block in the Caspian Sea.

india Updated: May 01, 2006 15:57 IST

ONGC Videsh Ltd is miffed by the demand for a fee by KazMunaiGaz (KMG), the Kazakh national oil and gas firm, to hold further discussions on the Indian flagship firm's efforts to take a 50 per cent stake in the prospective Satpayev block in the Caspian Sea, Kazakhstan.

Kazakhstan government had last year offered 50 per cent stake to OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), in either Satpayev and Makhambet blocks in the Caspian Sea. OVL envinced interest in the Satpayev block.

Now OVL is being asked to pay a fee for "further talks" with KMG on joint exploration and development of Satpaev Block. OVL, which has already spent a "considerable amount" in geological studies leading to idetification of prospects, has declined, the company sources said.

KMG was also asking OVL to pay an additional bonus at the exploration stage. OVL says it is willing to pay a signature bonus after the participating interest is assigned, but will not shell out any additional bonus at the exploration stage as it is meeting the entire exploration expenditure.

Sources said there were difference between the two on the equity stake in the block. When the two signed an MoU last February, OVL expected to get equal interest in the block.

OVL is also opposed to KMG becoming a joint operator during the exploration stage. It wants exclusive operatorship with KMG joining during the development phase.

OVL and KMG conducted a joint study of KMZ-owned Satpaev and Makhambet blocks in the Caspian part of Kazakhstan. When faced with an option of taking 50 per cent stake in either of the two blocks, OVL opted for Satpaev.