Focus wins 30-month extension at GK-ON/4

Vol 19, PW 11 (11 Feb 16) Exploration & Production

Good news and bad for London-listed Focus Energy.

First the good news: in January the DGH told the oil ministry it believes the AIM-listed explorer should be granted a 30-month extension to carry out its appraisal programme at the Nanak-G well at pre-NELP block GK-ON/4 in line with article 2.8 of the PSC which allows such an extension if a discovery happens at the end of Phase-III. Now the bad news: uncertainty lingers over whether Focus can keep the full 750-sq km area of the block that it wants.

For now the DGH has only recommended Focus keep 175-sq km. Worse, ONGC which is the block licensee with an option to take 30% in the development phase, believes Focus should only be allowed to carry out its appraisal programme in a small 40-sq km area.

Now it’s up to the oil ministry to decide. “According to the DGH the PSC says nothing about keeping the entire area,” explains a government source.

“But the block is categorised as a prospective area so if the ministry wants it can allow Focus to keep the area." There's excitement at the DGH that Nanak-G was in Mesozoic geology.

"It’ll be good if Focus can explore more,” adds a source. Focus has yet to submit its appraisal plan for Nanak-G.