Bengal Energy gives up on Cauvery offshore block

Vol 17, PW 16 (27 Mar 14) People & Policy
     

Toronto-listed Bengal Energy entered the Indian E&P sector with high hopes in December 2008.

Five years later things aren't looking so good. Bengal has been forced to ‘write off’ the $0.9m value of its 1362-sq km NELP-VIII Cauvery offshore block CY-OSN-2009/1, won in 2009 with 100%.

Bengal is struggling to operate the block alone with nearly $5m worth of 2D and 3D left to shoot before Phase-I ends on August 15 this year. Heavy penalties will follow if it fails to comply.

Fearing the worst Bengal's board agreed to the $0.9m write down in the last quarter of 2013 and to spend no more on the block until it finds a partner. Chayan Chakrabarty, president and CEO, brushes aside rumours it will relinquish the block.

"We're looking for partners to take up to 80%," he tells PETROWATCH. "Both ONGC and Oil India have acreage nearby and might be interested.

" In its Q3 report for 2013-14 Bengal confirms it is talking to the DGH about how to proceed if it can’t find a partner. A source says it is proposing 120-sq km 3D against its 81-sq km commitment if the 2D is waived.

"Bengal knows it will pay a penalty for its unfinished work programme," we hear. "That's why it's trying to reduce its 2D commitment.

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