Consortium unable to strike anything despite much drilling.
In the absence of any promising hydrocarbon discovery, a consortium of Oilex of Australia, Videocon Industries, Gas Authority of India (GAIL), Bharat PetroResources (BPRL) and Hindustan Petroleum (HPCL) is planning to exit from an exploration block in Oman.
The consortium got the block in 2006 from the Sultanate of Oman after paying around Rs 220 crore. The companies are looking at either farming out the block to some other company or surrendering it to the government.
GAIL, Oilex and Videocon have a 25 per cent participating interest each in the consortium, while BPRL and HPCL hold equal shares in the remaining 25 per cent. Oilex Australia is the operator group. This is the first overseas block awarded to BPRL, the exploration and production subsidiary of state-run Bharat Petroleum Corporation (BPCL).
“Due to lack of any hydrocarbon finding, we have decided to exit the block. We are in talks with our consortium partners and would decide on the same in the next couple of weeks,” said a senior official from BPCL.
The consortium is in discussion with the government of Oman to make changes in the production sharing contract, as the block 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.
“We had approached the Oman government and sought some revision in the terms of the contract. We were negotiating for some concessions, but things have not materialised. Since the block is not promising enough,we have decided to exit from the block,” confirmed an official from one of the companies in the consortium. The drilling in the block,no 56, began in early 2008.
“Since we have investments in other blocks in Oman, we have to consider the fact that our bilateral relations with Oman do not suffer,” the official added.
BPCL-promoted BPRL is also looking at exiting a shallow-water block in the North Sea (UK) that it acquired in early 2007. Till date, the company has acquired participating interests in 26 exploration blocks, in consortia with other companies. Of the blocks, nine are in India, two in Australia and the UK, one each in Oman, Mozambique and East Timor and 10 in Brazil.
To strengthen its operation in oil and natural gas exploration and production in Indonesia, BPRL, through its Indonesian subsidiary, bought a 12.5 per cent stake in Anadarko Indonesia Nunukan Company this week. The company made a capital outlay of $11.13 million towards drilling of wells.
BPCL has planned an outlay of Rs 3,000 crore on its capital expenditure. At the company’s annual general meeting held on Tuesday, chairman Ashok Sinha said a third of it would be spent on exploration and production activity done by BPRL.