New Delhi, Oct. 12: ONGC Videsh Ltd, the overseas arm of Oil & Natural Gas Corporation, today sealed a deal to buy a 25 per cent stake in Kazakhstan’s Satpayev offshore exploration block.

The company also entered into an agreement with Vietnam’s national oil company — PetroVietnam — to jointly look for oil and gas in the Southeast Asian nation and other countries.

OVL had paid $13 million as a signing amount to Kazakhstan. In addition, it will pay $80 million as a one-time assignment fee to KazMunaiGas (KMG), the national oil company of Kazakhstan.

The ONGC subsidiary has also committed a minimum exploration investment of $165 million and an additional optional expenditure of $235 million for the project.

In June last year, the Kazakhstan government had awarded the 1,582-sq-km Satpayev block to KMG, which is the operator with a 75 per cent participating interest.

The Satpayev exploration block is located in a highly prospective region of the North Caspian Sea. The block contains an estimated 256 million tonnes of hydrocarbon resource. OVL has got the cabinet’s approval to invest $400 million in the block.

Under the agreement with Kazakhstan, OVL can sell any discovery in the Satpayev block locally and use the cash generated from such transaction for purchases elsewhere. This is because there are no means to transport oil from Kazakhstan to India. Sources said OVL had an option to raise its stake by 10 per cent in the case of a commercial discovery.

Meanwhile, the pact with PetroVietnam was signed in the presence of the visiting Vietnamese President Truong Tan Sang and Prime Minister Manmohan Singh.

China had opposed OVL’s explorations in South China Sea, but New Delhi had made it clear that Beijing’s objections had “no legal basis” as the blocks belonged to Vietnam.

The agreement is for developing long-term cooperation in the oil and gas industry and shall be in force for three years.