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Business News/ Industry / Energy/  Oil India, IOCL to relinquish Yemen block due to deteriorating political situation
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Oil India, IOCL to relinquish Yemen block due to deteriorating political situation

At present all the work on exploration block are under suspension due to the deteriorating political and security situation in Yemen and all partners including Oil India and IOCL have decided to relinquish the block

Oil India, Indian Oil and other members of an international consortium led by Medco Energi of Indonesia were awarded Yemen’s exploration block-82 in 2006. Photo: BloombergPremium
Oil India, Indian Oil and other members of an international consortium led by Medco Energi of Indonesia were awarded Yemen’s exploration block-82 in 2006. Photo: Bloomberg

Mumbai: Civil strife in Yemen has forced Oil India Ltd (OIL) and partner Indian Oil Corp. Ltd (IOCL) to relinquish an oil block they won in the West Asian country in 2009, the OIL annual report said.

“All the works are under suspension, at present, due to the deteriorating political and security situation in Yemen. All partners have decided to relinquish the block," the report said.

Oil India, Indian Oil and other members of an international consortium led by Medco Energi of Indonesia were awarded Yemen’s exploration block-82 in 2006.

A production sharing agreement was signed in May 2008 and a presidential decree was granted in March 2009.

The Oil India report explained how work came to a halt.

“Acquisitions and processing of 236.5 kilometres of 3D seismic and 133.5km of 2D seismic has been completed. However, completion of the work programme was delayed due to frequent disturbances at the site. All the works are under suspension, at present, due to the deteriorating political and security situation in Yemen," the company said.

Oil Indian and Indian Oil did not reply to an email sent on 11 September.

The estimated reserves in block-82 were 87 million barrels and the estimated exploration expenses for the exploration period of six years would have been $8.31 million for the block.

Yemen’s civil war that began in 2015 has affected others doing business there, too.

Earlier, Reliance Industries Ltd (RIL) was forced to leave its blocks.

“Considering the deteriorating security situation in Yemen, consortium of Reliance Exploration and Production DMCC and Hood Energy Limited declared force majeure, thereby suspending its obligations under the production sharing agreements (PSAs) for the Yemen blocks-34 and 37 and, subsequently, terminated the production sharing agreements ," Reliance Industries had said in its annual report for fiscal 2016-17.

Reliance Industries added that the Yemeni government had issued demands under the letters of credit established pursuant to the terms of the production sharing agreements on account of alleged non-performance of production sharing agreement obligation.

“Reliance and Hood initiated arbitration proceedings against Yemen government under the terms of the production sharing agreements and the arbitration hearings have been concluded in 2016 and the parties are presently awaiting tribunal’s award," Reliance Industries’s annual report added.

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Published: 12 Sep 2017, 11:33 PM IST
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