Quippo wants to relinquish Bharuch city block

Vol 16, PW 17 (21 Mar 13) Exploration & Production

Quippo Oil and Gas must be regretting the day it bid for an onland exploration block in Gujarat.

PETROWATCH learns the Delhi-based driller and consortium partners want to relinquish NELP-VII block CB-ONN-2005/11 because it overlaps densely populated Bharuch city. Quippo made its intention clear to the DGH in a letter this month.

“We aren't interested in the block any longer,” says a source. “It’s not our core business.

The block is prospective but management is unenthusiastic." But another company source says Quippo is yet to decide finally.

Trouble began when the consortium received the PEL in September 2010 for just 214-sq km of the block's 257-sq km area. Gujarat authorities unilaterally omitted the 43-sq km densely populated patch of land near Bharuch city.

Quippo and partners complained loudly but no one listened. Now they’re adamant they won’t explore until they receive a PEL for the whole area.

If the block is relinquished partners will be forced to pay the unfinished work programme cost as penalty. Quippo (40%) jointly operates CB-ONN-2005/11 with Canadian minnow Primera Energy (10%) and Quest Petroleum (20%).

Also in the consortium is Quippo parent SREI Infrastructure (20%) and Vectra Investment (10%). Signed on December 22, 2008, the PSC commits partners to shoot 257 sq km 3D, 50-sq km high resolution 3D and 50-sq km multi-component 3D in the four-year Phase-I.

Also committed is a 3000-lkm airborne magnetic survey plus reprocessing an old 850-lkm airborne survey and 25-sq km 3D. Finally the consortium must drill 15 exploration wells to 3600 metres TD each.