MEA asks OVL to reconsider Cuba decision

MEA asks OVL to reconsider Cuba decision

SUJAY MEHDUDIA



With the US considering easing of sanctions, the Ministry of External

Affairs (MEA) is understood to have approached the Petroleum and Natural

Gas Ministry to impress upon the state-run Oil and Natural Gas

Corporation Videsh Ltd (OVL) to reconsider its decision to surrender the

oil and gas blocks held by it in Cuba.



Sources said MEA had conveyed to the Petroleum Ministry that the assets

were of vital importance and any move to exit would be ill-timed. OVL

has invested approximately $140 million in these blocks but is

withdrawing due to poor prospects. It has interest in 8 offshore oil and

gas blocks in Cuba (2 self-operated and 6 in partnership with Repsol and

Statoil of Norway.



In its communication, MEA has reached out to OVL citing recent

recommendations of a US study group which has sought relaxation of

restrictions imposed by the US administration on companies in oil

exploration activities in Cuba.



According to the MEA communication, the US study group has called for

lifting of sanctions reportedly to ensure prevention of marine oil and

gas disasters that will have severe ecological repercussions in the US

as well. The other reason for easing restrictions is the possibility of

allowing US companies to tap the hydrocarbon prospects available in and

around Cuba. Given the fact that US could change its view on Cuba, the

MEA has asked OVL to re-evaluate its option of withdrawing its

investment in the region.



OVL had long back entered into an agreement with Repsol-YPF of Spain to

acquire 30 per cent participating interest in the deepwater exploration

Blocks 25, 26, 27, 28, 29, 36 and part of Block 35 in Cuba. The blocks

are spread over an area of nearly 12,000 Sq Km in the exclusive economic

zone of Cuba.



Source: MEA asks OVL to reconsider Cuba decision - The Hindu -

http://www.thehindu.com/business/Industry/mea-asks-ovl-to-reconsider-cuba-decision/article5815176.ece