Taking a chance - IMC buys DSF-1 block in AP

As the name implies, Chennai-based Indian Molasses Company (IMC) is best known as the country's largest bulk exporter of molasses - a key ingredient in rum production.

But since its creation in 1935, IMC has diversified into ports and, more recently, the CGD and E&P space. On June 22 (2021), oil ministry deputy secretary Arvind Nath Jha approved a deal giving IMC-affiliate AVR Oil and Gas a 100% controlling stake in a 24.2-sq km discovered small field on the Andhra Pradesh coast, held by Hyderabad-based KEI-RSOS Petroleum & Energy.

"The acquisition process is still underway," confirms an IMC source. "At present, we're at the RSC amendment stage; it should take another month to complete all the formalities."

Jha directs the DGH to amend the RSC with AVR as operator and 100% stake in the oil ministry transfer note. Located at Kesavadasupalem village in the East Godavari district of Andhra Pradesh, KEI-RSOS won DSF-1 block KG/OSDSF/GSKV1/2016, or GSKV, in March 2017.

Since then, it has done little work. On March 5 (2019), the environment ministry issued KEI-RSOS the Terms of Reference (ToR) for an EIA study ahead of an estimated Rs50cr ($6.72m) three-well campaign with processing facilities and gas pipelines.

Still unclear is if AVR will stick to the KEI-RSOS plan or modify it. "We might make changes before moving ahead," adds IMC.

Will this makes any difference to the block's prospectivity? Discovered in 2008, ONGC quickly lost interest, declaring the field 'marginal' because of its perceived low prospectivity. "Other than production testing," admits an ONGC source, "we did not produce anything from this field."

Drilled in 2008, well GS-KV-1 tested 81,910 cm/d and 6.4 cm/d of condensate from Ravva formations while well GS-59-1, two years later, flowed 275 b/d crude and 13,080 cm/d gas. ONGC permanently plugged and abandoned both wells.