GAIL and GSPC struck oil in the sixth well drilled in a 1,424 sq km block under a joint venture agreement. Tests have proven the well to be a prolific light crude oil producer (360 API). A detailed geo-scientific study is currently being carried out for appraisal and commercialization of the reserves.
GAIL (India) Limited today also signed two Joint Operating Agreements (JOA's) for exploration and production in the NELP IV blocks. One agreement was signed with Enpro Finance Private Limited, for the Tripura block in the Assam-Arakan basin. GAIL has an 80 per cent participating interest in this block. The other agreement was signed for Cauvery basin block in Tamil Nadu, where both Enpro and GSPC are the consortium partners. GAIL holds a 50 per cent participating interest in this block. The Tripura block is expected to yield gas while both oil and gas are expected in the Cauvery (on-shore) basin. Exploration activities are currently in progress in both blocks.
In a bid to further strengthen its position as an integrated gas major, GAIL is actively pursuing E&P opportunities. The company is actively involved in exploration activities over an acreage of more than 90,000 sq km, and plans to invest approximately Rs 600 crore in E&P activities over the next three years.
GAIL holds a participating interest in 12 exploration blocks, comprising two NELP I blocks, six NELP II blocks, two NELP IV blocks and two 'farm-in' blocks. Out of these, four are on-land blocks and 8 are offshore blocks. The various consortium partners of the company in the 12 blocks are ONGC, GSPC, Gazprom, OIL, IOC, Hardy Exploration & Production, Enpro Finance Private Ltd., Daewoo, OVL and Korea Gas. GAIL's participating interests in these blocks varies between 10 to 80 per cent.
In order to develop a healthy portfolio of upstream assets, GAIL is actively involved in exploration and production in blocks of significant potential in the Bay of Bengal. These are blocks 7 (MS-OSN-2000/2), 24 (MN-OSN-97/3) and 26 (NEC-OSN-97/1) in the Bengal and Mahanadi basin. The data acquisition and drilling plans are being finalized and drilling activities in Block 26, in the Bengal basin, are expected to start by the end of the year.
GAIL is also a member of the consortium exploring the A1 offshore Myanmar block. The expected gas reserves are of the order of 14 to 42 tcf in four prospects. The drilling activity in one of the prospects has already confirmed the presence of gas reserves to the extent of 5 tcf. The Government of Myanmar has issued a letter of intent to GAIL as the preferred buyer for the gas produced from the A1 Block. Simultaneously, GAIL is also studying various options to transport the gas either through offshore and onshore pipeline routes or as LNG. The options being considered include a 500-600 km offshore pipeline across the Bay of Bengal, as well as a re-gasification terminal at Haldia for receiving the LNG shipped from Myanmar.
Further, both the Government of Myanmar and Daewoo have agreed to associate with the Indian consortium, comprising GAIL (India) Ltd and ONGC Videsh Ltd (OVL), for exploration and production in the A3 block offshore Myanmar. This block, adjacent to the gas bearing block A1, has a high potential for hydrocarbon finds. The A3 block was originally awarded to Daewoo International Corporation, Korea, by the Government of Myanmar in February 2004. The extent of participation by the Indian consortium and other commercial terms are under discussion and the consortium is hopeful of a sizeable level of equity participation. A negotiation team was recently in Seoul, Korea, to discuss the possibilities with Daewoo International.
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