The Oil and Natural Gas Corporation's (ONGC) overseas exploration arm, ONGC Videsh Ltd (OVL), gave up 10 per cent of its participating interest in the Lan Tay and Lan Do gas fields in Vietnam to PetroVietnam. The participating interest of the ONGC subsidiary now drops to 45 per cent from 55 per cent initially.

Two more agreements were signed by BP Amoco and Statoil, the other licence partners for Block 06.1 in offshore Vietnam. Both BP Amoco and Statoil have given up another five per cent participating interest in the gas fields to PetroVietnam.

The assignment agreements finally tie up the equity structure of the consortium members. The licence partners also signed a joint operating agreement and amending agreement, formalising PetroVietnam's full participation as aparty to the licence.

Key stake-holder ONGC Videsh Ltd's assignment agreement with PetroVietnam still keeps it the leading member of the consortium, followed by BP Amoco, which will have a participating interest of 26 2/3 per cent. PetroVietbnam's stake in the gas fields goes up to 15 per cent, while Statoil of Norway will own 13 1/3 per cent of the property.

"The finalisation of ownership is a key milestone in the planned development of the Block 06.1 gas discoveries," says ONGC Videsh director, finance, NC Pany, now in Vietnam. The $1.5 billion project, expected to begin flowing gas by early 2002, will be among ONGC Videsh's paying properties in the near future.

The other key point of contention between the share-owners, the gas price was resolved recently. The licence partners in Block 06.1 in offshore Vietnam have agreed to price the gas at $1.88 per million BTU (British Thermal Units).

The Lan Tay and Lan Do fields are estimated to produce roughly three billion cubic metres of gas per year. Thefields are expected to be in commercial production for at least 20 years.

The assignment agreement is one more formality before the billion dollar project goes on stream. The gas fields, estimated to contain two trillion cubic feet of gas, are expected to begin flowing 26 months after government and shareholder approvals have been tied up.

The Lan Tay and Lan Do gas fields, some 370 km southeast of Vung Tau on the southern Vietnam coast, were first discovered in 1993. The gas fields are located at water depths of 125 metres and 180 metres.

The fields contain `non-associated gas' implying that the gas reserves are not attached to oil reserves. The gas will be connected to mainland Vietnam through the Nam Con Som pipeline and will fuel a power plant being jointly set up by BP Amoco, Statoil, Tomen and Mitsui.