New Delhi, Sept. 20: ONGC Videsh Ltd (OVL) has signed an agreement with Repsol-YPF of Spain to acquire a 30 per cent participating interest in seven deep water blocks in Cuba.

The acquisition of the offshore blocks 25, 26, 27, 28, 29, 36 and part of block 35 will be completed after the Cuban government formalises the contract. Repsol-YPF ? the operator of the blocks ? will be left with a 40 per cent stake, while Norsk Hydro of Norway will own 30 per cent.

The acquisition marks OVL’s first foray into the Cuban oil and gas sector. The blocks are spread over nearly 12,000 sq km in Cuba’s exclusive economic zone. The hydrocarbon resource potential in the blocks is estimated to be in excess of 4 billion barrels. An exploratory well drilled in one of these blocks has indicated the presence of hydrocarbons.

These blocks are in the third exploration phase. The work during this period includes acquiring 3000 sq km. 3-D seismic data. Drilling wells on selected prospects will be decided in the next exploration phase.

OVL chairman Subir Raha said, “Cuba has drawn the attention of many international oil companies with the proven presence of hydrocarbons in its exclusive economic zone. The blocks have good potential. This deal is significant for OVL as it would open the door for other opportunities in the Latin American hydrocarbon sector. With this acquisition, OVL will be present in 13 countries.”

The breakthrough comes to OVL after it had lost out to the Chinese earlier this month the oilfields in Ecuador owned by Encana of Canada.

The opportunity is also expected to give OVL valuable insight into the deep sea oil exploration technology, an area where ONGC has just entered.

ONGC has recently signed an MoU with Norsk Hydro, a Norwegian company which specialises in deep sea oil exploration, for closer business co-operation. The MoU was part of the broader co-operation in the hydrocarbon sector between Indian and Norwegian companies. Petroleum minister Mani Shankar Aiyar had led the Indian delegation.