Heritage Oil in "operator compromise" with GSPC

Vol 4, PW 10 (21 Jun 00) Exploration & Production

Everybody wants to be operator.

That's the impression to emerge from talks presently underway between Gujarat State Petroleum Corporation (GSPC) and its proposed joint venture partner Heritage Oil & Gas of Canada. This report learns GSPC wants to assume operatorship of four of the six discovered fields for which it is in an alliance with Heritage and Baroda-based Hindustan Oil Exploration Company (HOEC).

Until now it had been widely assumed that Heritage would operate the Kanawara, Allora, North Kathana, and Dholasan oil and gas concessions in Gujarat. However, Petrowatch learns GSPC is now pitching for the operator title.

On 9th June the two companies held a meeting to discuss the issue at Heritage's office in central London. It is reliably understood GSPC is happy with a proposal by Heritage to set up of a "Collaborative Joint Operatorship Group," which draws on the experience of all three joint venture partners.

"The idea is that the local supervision will be indigenous, while the input of new technology will be expatriate," reveals Heritage, "There is no point in having 50 foreign nationals coming in if HOEC or GSPC already have the manpower on the ground." Precise details of the agreement will be incorporated in a Joint Operating Agreement (JOA), which Heritage hopes to negotiate with GSPC and HOEC after signing a Production Sharing Contract (PSC). For now all sides are engaged in a due diligence exercise of each other.

India's Directorate General of Hydrocarbons (DGH) this month requested more clarifications about Heritage.