OVL had entered into an agreement with Repsol-YPF of Spain to acquire 30 per cent participating interest in the deepwater exploration Blocks in Cuba.
With the U.S. 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 ONGC Videsh Ltd. (OVL) to reconsider its decision to surrender the oil and gas blocks held by it in Cuba.
Sources in the Petroleum Ministry said the MEA had conveyed to the Petroleum Ministry that strategically the assets are of vital importance and any move to exit would be ill-timed. OVL has invested about $140 million in these blocks but is withdrawing due to poor prospects. OVL has interest in eight offshore oil and gas blocks in Cuba. In its communication, the MEA has reached out to OVL citing recent recommendations of a U.S. study group which has sought relaxation of restrictions imposed by the U.S. administration on companies in oil exploration activities in Cuba.
According to the communication, the 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 U.S. as well. The other reason for easing restrictions is the possibility of allowing U.S. companies to tap the hydrocarbon prospects available in and around Cuba. Given the fact that the U.S. view point could change as far as Cuba was concerned, 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 in Cuba.