Good news also for Tullow's block GK-ON-90/2

Vol 5, PW 26 (27 Feb 02) Exploration & Production

MORE GOOD NEWS for Tullow, this time from onshore Gujarat block GK-ON-90/2.

A PSC for this 4,920-sq km block was signed in 1998, but no work could begin because the Petroleum Exploration Licence issued by Gujarat covered only half the block! The other half was excluded for reasons unknown, possibly because of it proximity to Pakistan. Tullow complained, and insisted the entire block be covered.

Three years later, Gujarat relented and last December a fresh PEL was issued for the entire block. "This is a piece of good news," Tullow tells PETROWATCH.

"The block is now operational." GK-ON-90/2 is one of five Tullow blocks 'farmed-in' by Reliance as operator last February. Tullow now waits for a single assignment to transfer 100% ownership from US-based Okland International - the original operator of GK-ON-90/2 and its Gujarat onshore block CB-ON/1 - to itself and Reliance.

This is expected in another four months. Tullow will then seek formal approval for Reliance to 'farm-in' as operator, giving Tullow 50%, Reliance 40% and Okland 10% in each block.

Reliance will then begin the work programme for GK-ON-90/2: 'Phase-I' (two years) will see a 'gravity survey' and shooting of 50 sq km 2D 'Phase-II' (two-years) will see one exploration well plus 500 km 2D seismic 'Phase-III' (three years) will see drilling of two wells A coal bed methane row between Gujarat and Delhi continues to hold up the paperwork for CB-ON/1. But Tullow keeps its fingers crossed.

"The PSC does not allow us to exploit coal bed methane. Moreover, we are not particularly interested in CBM and are anxious to pursue hydrocarbon exploration as soon as possible." But it is banking on assurances from Shastri Bhavan that the issue is close to resolution.