Three in GAIL race to evaluate OALP-7 block

Vol 25, PW 4 (27 Jan 22) Exploration & Production

Three consultants are in the race for a GAIL contract to evaluate one of eight areas on offer in OALP-7, most likely Cambay block CB-OSHP-2021/2.

GAIL opened technical bids on January 12 (2022) from Gurgaon-based consultants Samit Spectrum EIT, Vadodara-based Bharti Exploration, and Gandhinagar-based GSPC research wing Gujarat Energy Research and Management Institute (GERMI). By January 19 (2022), GAIL found all three had passed the technical evaluation.

"Next week, we will open financial bids," confirms a GAIL source. According to the tender document, whoever wins must carry out a comprehensive techno-commercial evaluation of GAIL's shortlisted OALP-7 block and prepare a report for due diligence and a clear recommendation on whether or not to bid.

Still unconfirmed, analysis by Petrowatch coupled with inputs from likely bidders point to the 1234.42-sq km Cambay block CB-OSHP-2021/2 as the most likely focus of GAIL's attention. Whoever wins must conduct a detailed evaluation of the block's geotechnical prospects and prepare a detailed geological model based on seismic, drilling, log and well data in and around the block.

GAIL wants the consultant to prepare a techno-economic model of the block based on the Revenue Sharing Contract (RSC) regime under OALP-7. This should include calculations of financial parameters like Internal Rate of Return (IRR), Net Present Value (NPV), payback period based upon production profile, oil and gas price assumptions, exploration, appraisal and development costs plus CAPEX and OPEX estimates.

Although the contract is for two months, GAIL wants a draft report within 15 days of submitting all data to the consultant and a final report within three days of submitting the draft report. "In case of extension of the OALP-7 bid deadline, the contract period will be extended until the bid deadline for a maximum of four months," reads GAIL's tender.

"So the total contract duration would be for a maximum of six months."