Varun Petroleum wants Madagascar partner

Vol 13, PW 23 (06 May 10) Exploration & Production

Mumbai-based Varun Group is best known for exporting stainless steel kitchen cutlery and cookware.

But it also has an oil subsidiary, Varun Petroleum, which wants a partner for one of two blocks it operates in Madagascar off the east African coast, where it holds 100%. Varun is offering a stake in the 13,200-sq km Sainte Marie shallow offshore block in Madagascar’s East Coast basin, lying in water depths of between 10 and 50 metres and awarded in April 2009 by Madagascar’s Office of National Mines and Strategic Industries.

Varun estimates the block has around 5bn barrels in-place oil (of which between 500m and 1bn barrels could be recoverable) and 50-tcf in-place gas (of which nearly 30-tcf could be recoverable). These estimates are based on past drilling data and ongoing geological and geophysical studies, we are told.

Varun says the Sainte Marie block is geologically similar to ONGC’s Bassein and Mumbai High fields, as Madagascar and India were contiguous before the continental drift several million years ago. Varun’s contract for Sainte Marie became effective from September 2009 and it is currently in the four-year exploration Phase-I during which it needs to shoot 2000-lkm 2D data and 25,000-lkm aeromagnetic data.

Varun also needs to reprocess old 2D shot by Western Geophysical (now WesternGeco) back in 1988. In the two-year Phase-II, Varun needs to drill one well to 100 metres below the target geological formation or within 10 metres of basement, or can acquire 300-sq km 3D.

Phase-III will last another two years and see one exploratory well. Both Phase-II and Phase-III at Sainte Marie are optional, depending on Phase-I results.

Varun says Tenneco Oil had earlier drilled one exploratory well to 1770 metres TD at Sainte Marie in 1973, encountering “oil bearing sandstone with excellent reservoir characteristics, porosity of between 28% and 32%, and hydrocarbon saturation between 65% and 75%.”