ONGC Videsh Ltd the overseas exploration arm of Oil and Natural Gas Corporation has invoked force majeure clause for its Libyan block following a war-like situation in the African nation. The block is in Cyrenaica offshore in the Mediterranean Sea.

A senior executive said that “We have four blocks in Contract Area 43 where we have drilling commitments. However, we had no option but to declare a force majeure in one block after the crisis broke. This will help us to get extra time to fulfill our drilling commitments.”

Invocation of the force majeure clause allows a contracting party to be exempt from fulfilling its contractual obligations in case of developments beyond their control. These developments usually include natural calamities or political events.

The company had invested approximately USD 36 million till March 31st 2010. Contract Area 43 was awarded to ONGC Videsh under the licensing round in early 2007. The contract area is spread over an area of 7,449 square kilometre. OVL holds 100% participating interest in the Contract Area with operatorship. The acquisition of 1011 LKM 2D and 4000 square kilometre 3D seismic data has been completed.

The official said that the company had surrendered Libyan block-81-1 in 2010-end since it did not generate a drillable well. He added that “We paid USD 4 million to absolve ourselves of our commitments.”

(Sourced from BS)