GSPC likely to accept KG partner bids on 9th January

Vol 10, PW 15 (16 Nov 06) Exploration & Production

British Gas, BP, ChevronTexaco and ENI take note.

PETROWATCH understands GSPC is likely to set 9th January 2007 as the new deadline for submission of bids for up to 30% equity in its discovery block KG-OSN-2001/3. Earlier plans to accept bids by 2nd November passed by uneventfully, as bidders pressed for test data of the ongoing well KG#15, which was terminated late last month at TD of 5745 metres and a TVD (total vertical depth) of 5669 metres.

Initial testing results will be available in early December and given to the four bidders as they come in. GSPC wants to receive financial bids by 9th January to coincide with the state governments annual Vibrant Gujarat trade fair in Gandhinagar.

(Chief minister Narendra) Modi wants to make an announcement during Vibrant Gujarat, says a source. But the bids still need to be evaluated.

It will take time before a strategic partner is chosen. Industry sources tell us the state government and GSPC would be foolish to raise their hopes too high about the kind of money they will be offered for a stake in the block.

This block measures 1850-sq km and supposedly holds nine different reservoirs, says a source. GSPC has discovered only one reservoir.

All the others are pure exploration plays. Talking about discoveries from any of them is purely hypothetical.

Adds a source: All the wells now being drilled are on that one reservoir discovered in KG#8. It makes no sense to extrapolate this discovery to the other, undiscovered reservoirs.

These undiscovered reservoirs have a much higher risk value. Some potential bidders express surprise when GSPC talks of a 20-tcf find.

We are told that GSPC and the state government painted themselves into a corner with these big numbers about the reserves and might be disappointed when the bids actually come in.