GAIL: Determined to explore RJ-ONN-2004/1

Vol 18, PW 13 (26 Feb 15) Exploration & Production

GAIL is determined to make a second attempt to win oil ministry approval to continue exploration at its “prospective” Rajasthan block RJ-ONN-2004/1.

Last September the oil ministry turned down GAIL’s request for a one-year extension to Phase-I. But in October GAIL held informal but positive talks with oil secretary Saurabh Chandra.

As a result, GAIL is now planning to approach the ministry again, this time for permission to enter the three-year Phase-II, under which it must drill two exploration wells, possibly beginning in March. Five exploration wells have already been drilled in Phase-I, all of them dry.

GAIL wanted to drill a sixth well but this request was rejected by the oil ministry as Phase-I ended on May 5, 2013. So why is GAIL persisting? Look to a 45-day study carried out by Ahmedabad-based Josler Hydrocarbons, submitted to GAIL in December 2014.

Josler believes the block is highly prospective with 100m barrels of recoverable reserves. Its study says each well can produce 250 b/d for 20 years.

With more than 70 wells that means 18,000 b/d. Yet GAIL is struggling to convince partners GSPC, HPCL, BPCL, Hallworthy Shipping and Nitin Fire Protection Systems.

“We may have to go solo,” says GAIL. “But we must convince our own finance department first.