BackONGC gains 5% as overseas subsidiary strikes oil in Colombia block
OVL holds participating interest in seven exploratory blocks in Colombia in addition to two producing blocks with 50% stake in a joint venture company Mansarovar Energy Colombia
PremiumMUMBAI: Shares of Oil & Natural Gas Corporation Ltd (ONGC) rose 5% after its wholly-owned overseas arm ONGC Videsh Ltd (OVL) reported a "significant" strike of oil in its onshore block CPO-5 in Llanos Basin in Colombia.
At 0155 pm, ONGC shares traded 2.3% higher at ₹91.90, while the benchmark Sensex was up 0.5% at 45289.89.
OVL is the operator of block CPO-5 in Llanos Basin with a 70% stake while its partner Geopark holds the remaining 30%. This is the fourth commercial find in the block by OVL. The announcement was made on Friday after market hours.
Oil was discovered in the first well Indico-1X in the Indico field during December 2018, and till date it has demonstrated a sustained flow at 5,200 BOPD with a cumulative production of over three million barrels of oil so far. CPO-5 is a large onland block covering 1,992 square kilometer (SKM) and offers exploratory and appraisal opportunities. OVL now plans to drill more wells to explore other plays in the block in immediate future.
OVL holds participating interest in seven exploratory blocks in Colombia in addition to two producing blocks with 50% stake in a joint venture company Mansarovar Energy Colombia.
The company also owns participating interests in 37 oil and gas assets in 17 countries and produced about 30.3% of oil and 23.7% of oil and natural gas of India's domestic production in 2019-20. In terms of reserves and production, OVL is the second largest petroleum company of India, next only to its parent ONGC.
ONGC reported a 55% year-on-year decline in its standalone net profit to ₹2,878 crore for the September quarter as the pandemic hit earnings from oil and gas. Standalone revenue from operations fell 31% to ₹16,917 crore.
The government of India holds a 60.41% stake in the company.
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