With the US considering easing of sanctions, the Ministry of External Affairs (MEA) is understood to have approached the Petroleum and Natural Gas Ministry to impress upon the state-run Oil and Natural Gas Corporation Videsh Ltd (OVL) to reconsider its decision to surrender the oil and gas blocks held by it in Cuba.
Sources said MEA had conveyed to the Petroleum Ministry that the assets were of vital importance and any move to exit would be ill-timed. OVL has invested approximately $140 million in these blocks but is withdrawing due to poor prospects. It has interest in 8 offshore oil and gas blocks in Cuba (2 self-operated and 6 in partnership with Repsol and Statoil of Norway.
In its communication, MEA has reached out to OVL citing recent recommendations of a US study group which has sought relaxation of restrictions imposed by the US administration on companies in oil exploration activities in Cuba.
According to the MEA communication, the US study group has called for lifting of sanctions reportedly to ensure prevention of marine oil and gas disasters that will have severe ecological repercussions in the US as well. The other reason for easing restrictions is the possibility of allowing US companies to tap the hydrocarbon prospects available in and around Cuba. Given the fact that US could change its view on Cuba, the MEA has asked OVL to re-evaluate its option of withdrawing its investment in the region.
OVL had long back entered into an agreement with Repsol-YPF of Spain to acquire 30 per cent participating interest in the deepwater exploration Blocks 25, 26, 27, 28, 29, 36 and part of Block 35 in Cuba. The blocks are spread over an area of nearly 12,000 Sq Km in the exclusive economic zone of Cuba.