ONGC Videsh (OVL), a wholly owned subsidiary of Oil and Natural Gas Corporation (ONGC), has signed a production-sharing contract (PSC) for two shallow-water exploration blocks in the Bay of Bengal, Bangladesh.

The company, which will explore oil and gas in the blocks including SS-09 and SS-04, formed a consortium with Oil India (OIL), (50:50) and participated in the Bangladesh offshore bidding round 2012.

The Bangladesh Government launched the bidding round during December 2012, in which OVL/OIL consortium was officially announced as the winner of the two water blocks on 20 August 2013.

Subsequently, on 19 September 2013 the contract was discussed and initialled and the Government of Bangladesh approved the award of the blocks to OVL/OIL consortium on 3 December 2013.

"During the initial exploration of the blocks, OVL plans to invest $103.2m under the contract."

Petrobangla, the Bangladesh oil, gas and mineral corporation, awarded the water blocks to OVL.

During the initial exploration of the blocks, OVL plans to invest $103.2m under the contract.

An in-depth seismological survey of the blocks will also be conducted during a five-year initial exploration period, followed by a three-year period.

The contractors will have the right to operate and sell oil and gas for 20 years and 25 years from an oil field and a gas field, respectively.

According to a document distributed to reporters during the signing event, OVL must offer to sell gas to Petrobangla and if the offer is rejected within a period of six months, the contractor has the option to sell it in Bangladesh, Reuters reported.

OVL currently participates in 35 projects in 18 countries including Azerbaijan, Bangladesh, Brazil, Colombia, Iraq, Kazakhstan, Libya, Mozambique, Myanmar, Russia, South Sudan, Sudan, Syria, Venezuela and Vietnam.