BG happy to return PMT when PSC expires...

Vol 18, PW 6 (06 Nov 14) Exploration & Production

BG won’t confirm it but the word is out the UK operator would be more than happy to return the Panna, Mukta and Tapti (PMT) fields to the government when the PSC ends on December 22, 2019.

Contacted by this report, BG refuses to comment on speculation it is no longer interested in the fields. But why is it, ask some, that BG hasn’t applied to the oil ministry or DGH for an extension to the 25-year PSC, signed on December 22, 1994 with original operator and disgraced energy trader Enron? Nor does BG (30%) seem in any hurry to discuss a possible PSC extension with joint operators ONGC (40%) and Reliance (30%).

In contrast, say sources, Cairn India is showing its commitment to the Ravva field by asking for an extension to the PSC beyond December 2019 and complaining loudly at the government’s snail-pace response. “Cairn also wants an extension to its Rajasthan (RJ-ON-90/1) PSC,” we hear.

Others say BG is doing little to maintain the Panna reservoir to ensure production continues beyond December 2019. “BG should have begun injecting water to maintain reservoir pressure five or six years ago,” says a source.

“But it has done nothing. You’d think it doesn’t want to spend money.

Panna today produces 21,000 b/d from 54 wells and 5.85m cm/d (205m cf/d) but is suffering an annual 18% production decline.