Homework a must before bidding for NELP-VII blocks

Vol 11, PW 22 (20 Mar 08) Exploration & Production

First time oil and gas investors drawn to India’s exploration sector would be well advised to do their homework before bidding in the NELP-VII round, which closes on April 25.

India’s oil ministry is for the first time offering a new category of blocks to attract non-E&P companies. Known as Type â€کS’ (â€کS’ for small) blocks, the inclusion of nine such onland blocks in Gujarat’s prospective Cambay Basin is widely applauded.

Foreign and domestic companies are expected to bid in strength for these blocks. But anyone bidding for them needs no past E&P experience, running the risk of bidding blindly, and finding themselves in an uncomfortable, even embarrassing position.

Block CB-ONN-2005/6, measuring 102-sq km, is a good example. This block looks promising geologically to the untrained eye because it lies adjacent to the Ognaj field, operated by Selan Exploration.

To the east, lies the Kalol field, operated by ONGC and to the west is the Sanand field, operated by GSPC. Yet don’t be taken in by these promising sub-surface associations: above ground lies the thickly populated southwestern extension of Ahmedabad, the state’s commercial capital.

Type in the coordinates, and see for yourself that the Sabarmati and Gandhigram Railway Stations, the Science City, several townships and even a portion of the Gujarat High Court all lie within the block boundary! This might be useful if you are planning ahead for litigation, or if you are late for a train, but logistically, it’s a nightmare for exploration. Similar problems centre on the 257-sq km CB-ONN-2005/11 block.

Within this block lies the bustling town of Bharuch. To the casual observer this block also seems promising because the Palej field operated by HOEC lies to the north and the giant Gandhar field operated by ONGC lies to the west.

Why were these blocks offered “Those in charge probably looked only at the sub-surface geology and not at the surface reality,â€‌ we hear. “But because of the geology both blocks could still attract a lot of bids.