News: GAIL secures exploration deal in Oman

(DNA 29/06/2006) New Delhi - GAIL (India) Ltd, along with its consortium partners, signed the exploration and production sharing agreement (EPSA) with the Sultanate of Oman for Block 56 in Muscat on Wednesday.

GAIL and Videocon will hold 25% in the block, with Oilex Australia holding 25% along with the operatorship. Other partners include HPCL and BPCL, with 12.5% holding each.

Block 56, an onshore block located in the South Oman Salt Basin area, located in the eastern flank, covers an area of 5,809 sq km. The block, adjacent to existing producing fields, was the consortium’s first choice block and the highest rated of the blocks on offer, in the bid round that closed on January 1, 2006.

The Sultanate of Oman had offered five blocks (Block 54, 55, 56, 57 and 58) in the fringes of the south Oman salt basin under the competitive bidding round. Blocks 54, 55 and 56 were in the eastern flank, whereas Block 57 and 58 are in the western flank.

As per the consortium’s commitment under the EPSA, work will commence with the reprocessing of existing seismic data, followed by the acquisition of 2D and 3D seismic in the last quarter of 2006, depending on the availability of seismic contractors. Drilling in the block is expected to start in the first half of 2007.

The consortium has assessed the potential of the block, based on the possibility of salt-related structures that are similar to the producing blocks in the west flank of the basin.

With the award of this block, GAIL’s total exploration acreage has increased to 91,350 sq km. GAIL now holds a participating interest in 16 exploration blocks.

The various consortium partners of the company in these blocks are ONGC, GSPC, Gazprom, OIL, IOC, Hardy Exploration & Production, Enpro Finance Private Ltd, ENI India Ltd, Jubiliant, GGR Canada, Daewoo, OVL, Korea Gas, Oilex, Videocon, BPCL and HPCL. GAIL’s participating interests in these blocks varies between 10-80%.

GAIL has been looking to widen its E&P horizons to include strategic regions beyond Indian shores. GAIL’s earlier international foray in E&P in Myanmar has been quite successful, with large gas discoveries in the A1 & A3 Blocks.

GAIL plans to aggressively pursue various exploration avenues and acquire E&P acreages in the international arena in consortium with international E&P players, said a company statement. GAIL has also been pursuing several “farm-in” opportunities worldwide to gain a strategic position in the international E&P market.