ONGC Videsh Ltd, the overseas investment arm of ONGC, had in July 2012 reversed its decision to exit Block 128 as Hannoi offered additional data that could help it make future exploration economically feasible and discovering hydrocarbons commercially viable.
"We are looking for a partner for Block 128 where we currently hold 100% interest. We are talking to (Vietnam's national oil company) PetroVietnam and some others," OVL Managing Director S P Garg said here.
OVL, he said, wants to retain a majority 51% stake in Block 128 and the remaining it wants to offer to PetroVietnam to de-risk exploration in the block over which China had claimed territorial rights.
Ignoring objections from China, OVL had in July 2012 decided to continue to explore for oil and gas offshore Vietnam in the South China Sea. OVL had in June 2012 decided to return Block 128 to Vietnam as exploration there wasn't commercially viable but it did an about-turn at the insistence of the Ministry of External Affairs which wanted India to continue its presence in the South China Sea.
Vietnam gave a two-year extension of exploration period, which now expires in June 15, 2014, he said.
China had opposed India's presence in the region, claiming its own territorial rights over the potentially energy-rich sea. China claims sovereignty over much of the South China Sea, including areas close offshore some of its bordering states, putting it in conflict with Vietnam, the Philippines, Malaysia and Brunei.
The July 2012 extension of exploration phase came at a time when China National Offshore Oil Corp, or Cnooc, offered nine blocks in the South China Sea for joint exploration with foreign companies, including parts of Block 128, which Vietnam says is inside its 200-nautical-mile exclusive economic zone granted under the United Nations' Law of the Sea.
PetroVietnam had urged China to cancel bidding for the blocks, saying they are in Vietnamese waters. The fate of the bidding round is unknown.
Asked why OVL decided to stay put in Block 128, Garg said Vietnam had offered additional data which the company wanted to study. "We as OVL, we make investments based on commercial considerations and on energy security considerations and not on strategic considerations.