KG onland hurdle for Oil India and GeoGlobal

Vol 15, PW 10 (17 Nov 11) Exploration & Production

Here’s another example of the Indian government carelessly awarding prime exploration acreage in the middle of an ecologically sensitive no-go zone.

This time operator Oil India (90%) and Canadian partner GeoGlobal Resources (10%) are the hit as they grapple with local authorities in Andhra Pradesh to be allowed to shoot 3D in a 428-sq km forested area protected by law that falls within their 549-sq km KG onland block KG-ONN-2004/1. “Our officers last visited Hyderabad to meet forest department officials on November 14,” we hear.

“We will continue trying to secure permission for the seismic survey.” As a precaution, Oil India is also talking to the DGH to secure a six-month extension to the four-year Phase-I exploration period that ends in February 2012.

“We met DGH officials (to discuss the extension) on November 13,” adds a source. “This is an ‘excusable delay.

’” Oil India hired seismic contractor KCS in January to shoot 500-sq km of 3D at the block. KCS completed nearly 240-sq km of the survey before realising it needed permission to enter the forest reserve, which Oil India believes is the most ‘prospective’ area in the block.

Despite the potential obstacle, Oil India is going ahead with plans to tender for a rig and allied services to drill three Phase-I committed exploration wells. “If this forest was a protected ‘wildlife sanctuary’ we’d give up right away,” says Oil India.

“But it is only designated as a ‘reserve’ so we believe we can get exploration permission.” A drilling industry source is not so sure.

“Oil India will have a tough time getting permission,” he says. “That (forest reserve) area is a breeding ground for endangered birds, animals and plants.

” Oil India issued an Expression of Interest (EoI) notice on August 26 this year to hire a 3000-hp rig.