GSPC ultimatum to GeoGlobal over KG-OSN-2001/3
GSPC has issued an ultimatum to GeoGlobal Resources of Canada to decide if it wants to continue to be part of the exploration programme at KG-OSN-2001/3 in the Krishna Godavari Basin.
PETROWATCH learns GSPC sent a letter to GeoGlobal last week giving the company 10 days to respond. An industry source tells us GSPC took this step as a fall-out to a separate unresolved dispute with GeoGlobal (see below) over the â€کcarried’ interest at the block and because the minimum work programme is completed.
“From September the minimum work programme on the block has been completed and this has been certified by the DGH,â€‌ we hear. “Whatever exploration is carried out from October 1 is outside the minimum work programme and the partners must choose whether they want to be part of it.
â€‌ Jubilant, the third partner on the block, with 10%, has approved the budget for exploration beyond October 1, but so far there is no word from GeoGlobal, also with 10%, prompting the GSPC letter. “Putting this on record is important so Geoglobal is formally informed that from October 1 there is no obligation on GSPC’s part to â€کcarry them in the exploration programme,â€‌ we are told.
“GeoGlobal should not be under any mistaken impression about this.â€‌ Three wells currently being drilled on the block: KG#19, KG#32 and KG#21 are outside the minimum work programme and GeoGlobal will have to pay 10% of the exploration cost, says GSPC, which believes an additional $700m to $800m will be spent on exploration activities between October 1 and September 30 next year, when the exploration phase ends.
“If GeoGlobal wants to be part of this additional exploration it will have to bring in its share,â€‌ we hear, “Otherwise it will be excluded from participating in any discoveries.â€‌