India’s interests in Bazhenov shale hit by U.S. sanctions

Gas well in Siberia
Source: DollarPhotoClub

Plans to explore the Siberian Bazhenov Shale by the Indian company ONGC Videsh may be disrupted by the U.S. imposed sanctions against Russia – Reuters reported on Tuesday.

ONGC Videsh, the overseas investment arm of Indian oil explorer Oil and Natural Gas Corp, may not be able to continue exploration of the Bazhenov Shale because it has contracted a U.S. company to drill the exploratory wells in the formation. So far only one well was drilled.

Denver-based Liberty Resources will be prevented from continuing work in Russia because of the sanctions which ban U.S. companies from carrying out E&P activities in the country.

The Russian assets of ONGC Videsh comprise the oil-rich Bazhenov – which according to the EIA estimates holds estimated 75 billion barrels of technically recoverable shale oil, more than in the U.S. – as well as acreage in western Siberia’s Tomsk region, and a 20 percent stake in the Sakhalin 1 project. The company is also in talks with Rosneft over a stake in two east Siberian oil fields.

Having been disappointed by production in the Tomsk region, where complex geology caused output to be much lower than initial estimates, ONGC Videsh is looking towards shale to boost its output.

The company hopes that Liberty will be allowed to continue exploration because the deal between the two companies was signed one year ago – well before the sanctions were imposed.

“Liberty Resources is seeking a U.S. export license or permission to continue with the project. If it doesn’t get that then there could be a delay in Bazhenov shale exploration,” ONGC Videsh managing director N.K. Verma said on Tuesday.

ONGC Videsh has 13 producing assets spread across Russia, Azerbaijan, Syria, Sudan, South Sudan, Vietnam, Myanmar, Colombia, Venezuela and Brazil.

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