Essar Energy plans to press on with exploration drilling at its blocks in India and Vietnam in September-October as the firm steps up efforts to increase its crude oil production even as energy companies reduced capital expenditure in response to the slump in global oil prices that began in the second half of last year, a senior company official said, as reported in local daily The Economic Times Tuesday.
"We will be drilling a couple of exploration wells in Mumbai offshore (in India) and Vietnam in the fair weather window later this year. Depending on the results of the initial drilling, we will decide how many wells we want to drill," Manish Maheswari, CEO - Exploration and Production at Essar Energy's oil and gas unit Essar Oil said.
The plan to proceed with exploration drilling at the two blocks comes after joint venture partners completed mapping the prospects based on 3D seismic data for these offshore blocks.
Essar Energy has a 30 percent stake in shallow water exploration block MBOSN-2005/3, located near the Mumbai High field offshore Mumbai, while state-owned Oil and Natural Gas Corp. Ltd. (ONGC) holds the remaining 70 percent interest.
The Indian firm hopes to capitalize on significantly lower cost for its exploration drilling campaigns as oilfield service providers have reduced costs by up to 30 percent in a bid to grab a slice of the shrinking market, he added.
"The E&P (exploration and production) sector has not seen any activity in India since 2010. We have assets at different stages and have prioritized certain assets. Now the focus is to ramp up production and convert these assets into mature producing properties," Maheswari commented.
Over in Southeast Asia, Essar has a 50 percent interest in Block 114, while Italy's Eni S.p.A. holds a 50 percent operating stake. The block is located in Song Hong Basin offshore Vietnam and the joint venture will drill two exploration wells as part of their production sharing contract commitment. Eni acquired the 50 percent interest from Essar in mid-2012.
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