ONGC Videsh, the overseas arm of state- owned explorer ONGC, has made a second oil discovery in Colombia that has raised the prospects of its onland block in the South American nation.
The well, Indico-1, is in the onshore block CPO-5, the company said in a statement on Saturday.
OVL is the operator of the block with a 70 per cent stake while Petrodorado South America S A Sucursal (PDSA) of Colombia holds the remaining 30 per cent.
Drilling began on November 7, 2018 and was completed on December 15, 2018.
OVL had earlier discovered commercial oil in the well Mariposa-1 in the block in 2017, which is located 6.5 km from Indico-1, and the continuation of same play is confirmed in the recent well.
The company now plans to drill more exploratory wells to chase this important oil corridor in the immediate future.
OVL is also acquiring additional 3D Seismic data to map more drillable areas in other sectors of the block.
“Indico-1 encountered Lower Sands (LS-3) of Une Formation (Cretaceous) at a depth of 9,833 feet and found to be oil bearing, before terminating the drilling at 10,602 feet (MD) in Paleozoic. The well was successfully logged and found to have 284 feet of gross thickness and 241 feet of net pay,” the statement said.
During tests, the well flowed at a self-flow rate of about 4,000 barrels of oil per day. “Currently, the well is under Short-Term Testing with multi-bean study for further evaluation,” it said.
OVL, which has a stake in 41 projects in 20 countries, has a significant presence in the Colombian oil and gas sector and holds a stake in six exploratory blocks in addition to a producing 50:50 joint venture, Mansarovar Energy Colombia Ltd (MECL). Under its portfolio, OVL has reserves of 711 million tonnes of oil and oil equivalent natural gas.
The board of ONGC had recently decided against listing its overseas arm as the market conditions were not conducive.
Company officials said ONGC Videsh has assets in countries such as Venezuela, Iran, and Sudan, which are exposed to some or other Western sanctions. These assets will have to be first separated from the company. While this may not be a difficult task, it would involve issues of capital gains and tax thereon.
Also, OVL is heavily in debt and a flotation proposal would require taking approval of all lenders—yet another tedious job. A third of its $28.45 billion investment in 41 projects in 20 countries has been financed by loans.
