Eni faces â€کDesert National Park' dilemma in Rajasthan

Vol 13, PW 5 (13 Aug 09) Exploration & Production
     

Sergio A.

Laura has been a busy man since he took over as country manager of Italian explorer Eni at the end of May. Laura, we hear, has held several meetings with DGH boss VK Sibal on how to proceed with Rajasthan onland block RJ-ONN-2003/1 near Jaisalmer, not far from the Pakistani border.

An industry source tells us the main subject of discussion was the fact that three leads identified by Eni for drilling in this block fall in a protected â€کDesert National Park’ sanctuary. This is unfortunate, as Eni now needs to re-negotiate permission to drill.

Of the total 1335-sq km of the NELP-V block, some 693-sq km falls in the â€کDesert National Park’. In 2006, Eni hired Polish contractor Geofyzika Torun to acquire 642-sq km 3D in the â€کnon-protected’ portion of RJ-ONN-2003/1.

But Eni has reached a â€کdead-end’ with that â€کnon-protected’ area, we hear and its options are limited. The best outcome is that it gets permission to drill in the protected area so it can fulfil its Phase-I work commitment.

Other options could be more complicated. The DGH could allow Eni an â€کexploration vacation’ until permission to drill in the protected area comes through.

(Eni has already secured a DGH extension to the Phase-I exploration period till January 22, 2010). Or, in the worst case, Eni relinquishes the block.

“The â€کexploration vacation’ option has no precedent in the PSC,â€‌ says an industry source. “The ball is in the DGH’s court; it must decide.

â€‌ On site, meanwhile, Eni is restoring its first (dry) exploration well, drilled to TD of 2700 metres using a 2000-hp rig from Ahmedabad-based John Energy. “The site is being restored so it can be returned to the state government,â€‌ adds a source.

Eni must drill three more exploration wells at RJ-ONN-2003/1 to fulfil its Phase-I work commitment. Operator Eni has a 34% stake in this block, alongside ONGC with 36% and Cairn India with 30%.