A consortium of Oilex of Australia, Videocon Industries, Gas Authority of India (GAIL), Bharat Petro Resources (BPRL) and Hindustan Petroleum (HPCL) are re-evaluating their commitment to exploration block no 56 in Oman, which it won in 2006 from the Sultanate of Oman for around Rs 220 crore.

The consortium is in discussions with the Government of Oman to make changes in the production sharing contract, as the block awarded to them in 2006 no longer seems to hold promising reserves. It is an onshore block located in the south Oman salt basin area and covers an area of 5,809 sq km.

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The consortium began drilling in exploration block no 56 in early 2008. GAIL, Oilex and Videocon have 25 per cent participating interest each in the consortium. Whereas, BPRL and HPCL hold 12.5 per cent each. Oilex Australia is the operator group. On the basis of the reprocessed data and existing 3D seismic surveys, a number of exploration well locations were developed for drilling during 2008. It was only later that the consortium realised the block did not hold reserves as it thought.

“As a consortium, we also have to consider the fact that our bilateral relations with Oman do not suffer. We have investments in other blocks in Oman,” the official added.

Falling crude prices and the global credit crunch has prompted exploration and production (E&P) companies worldwide to consolidate their E&P position. Several domestic and international companies are opting to sell part of their participating interest in E&P projects. Also, players who diversified from their core businesses into exploration and were attracted to the sector when the crude oil price was at its peak are now defaulting on payment to meet the E&P commitment.

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