New Delhi, March 4: Essar Oil has bagged an offshore oil and gas block in Vietnam’s Song Hong basin and plans to invest $60 million. Essar Exploration & Production Ltd, a subsidiary of Essar Oil, has acquired the shallow water block to explore about 5,925 square kilometres.

The block was offered by the Vietnam government under its seventh round of offshore licensing process.

Besides seismic studies, the Essar subsidiary will drill two exploratory wells of 3,500 metres depth. The exploration phase is likely to last five years.

Apart from the Vietnam block, Essar has seven oil and gas blocks — one each in Nigeria and Madagascar; and five in India. Essar Oil is consolidating its upstream exploration and production activities under Essar Exploration & Production.

Nelp update

Petroleum minister Murli Deora told the Rajya Sabha today that six rounds of bids had been concluded under the New Exploration & Licensing Policy (Nelp), with the government signing production sharing contracts for 162 exploration blocks.

Under Nelp, 56 oil and gas discoveries in 17 blocks have been made in the Cambay basin, the Northeast and the Krishna-Godavari basin. The government expects natural gas production to double by the end of the Eleventh Five Year Plan (2007-2012) from 90 million standard cubic metres per day now.