Shastri Bhawan holds key to Premier's deal

Vol 6, PW 15 (25 Sep 02) Exploration & Production

GETTING OPERATORSHIP AND resolving the numbers for CR-ON-90/1 will be easier said than done for Premier.

"The addendum to the PSC for Tullow's 25% assignment from Essar and HOEC has yet to be signed by the government," reveals a source. " It is pending for the past three months." This minor irritant needs to be resolved before Tullow's application to exit in favour of Premier is taken up.

Then, official approval is needed for the HOEC and Essar proposals. No guess how much time this will take, but going by past performance don't expect anything in a hurry from Delhi's bureaucratic maze! Once Premier clears all the hurdles and begins as operator it must speed up the minimum work programme, currently in 'Phase-I'.

This involves reprocessing and reinterpretation of 100-km old 2D and acquisition of 200-km fresh 2D. "Reprocessing and reinterpretation is underway," we learn.

"Fresh 2D has yet to be shot." 'Phase-II' of the minimum work programme involves refinement of 2D already acquired and one exploration well to a depth of 2,500 metres. 'Phase-III' assumes two wells each to a depth of 2,500 metres.

Besides CR-ON-90/1, Premier wants to farm-in as operator to AAP-ON-94/1, where HOEC has 90% and Oil India 10%. Post farm-in Premier will be operator with 38%, Indian Oil with 27%, HOEC with 25% and Oil India with 10%.

HOEC submitted its application to the oil ministry in April but there's no progress to report. "The file has been shuttling between the oil and finance ministries for the past six months," reveals a source.

"Every time we are told the clearance will come next week."