Petrom of Romania shelves India and winds up

Vol 8, PW 1 (07 Apr 04) People & Policy

In our last issue we revealed that US oil major Unocal is winding down its India operations.

Early this month on 4th April, another foreign oil major did the same: Romanias state-owned Petrom closed its office in India, for the second time. This time, the move is linked to the companys ongoing privatisation in Romania.

Petrom first entered India in 1997 through a joint venture with an Indian partner and bought 41% equity in Essar Oils offshore Mumbai exploration block BB-OS/5. Three years later the joint venture broke up over the Indian partners non-performance and Petrom quit India late 2000.

The next year Petrom returned to India on its own strength and eventually bought 51% stake and operatorship in BB-OS/5. Essar held the balance 49%.

But BB-OS/5 was unlucky for Petrom. The first well on this block, drilled during Phase-II of the exploration period from January to April 2002, turned out dry, dampening enthusiasm amongst Petrom bosses in Bucharest to embark on Phase-III.

Our management decided to look for one more partner to dilute our stake, Petroms India chief Artur Stratan tells PETROWATCH. Reliance and British Gas showed interest but nothing moved forward.

In March last year we surrendered the block to the government. And, sometime in November or December our management decided to close operations in India.

On paper BB-OS/5 was Petroms only major investment it spent $10.5m in Phase-II in Indias upstream sector. For about two years to 1997 we tried (unsuccessfully) to farm-in to two onland Cambay Basin exploration blocks, says Stratan.

Both blocks eventually went back to the government and were offered in NELP-II as a single block. We bid for this block but lost to GSPC-Niko.

Petrom also initiated talks for two Assam blocks: Amguri and AA-ON-7 but backed out over security concerns. Then came unsuccessful efforts to partner Reliance and Enron in Rajasthans Baghewala field to recover heavy oil by in-situ combustion.

Petrom persisted even after Oil India took over Baghewala.