Oilex finds working in India much easier than before

Vol 10, PW 2 (18 May 06) People & Policy
     

Greg Chappell is not the only Australian leading an Indian team.

Bruce McCarthy, managing director of Australian explorer Oilex, is fast emerging as the partner of choice for mid-size private and public sector Indian oil companies hunting for equity abroad. McCarthy is on track to sign a PSC with Oman authorities in June for exploration Block 56, which Oilex (25% and operator) won with GAIL (25%), Videocon (25%), Bharat and Hindustan Petroleum (12.5% each).

After the PSC well do 2D and 3D and then drill two or three wells, says McCarthy. Theres hardly any data on this block so seismic is crucial.

Two or three drafts of the PSC have been exchanged already. Oilexs relationship with GSPC in India is particularly strong, explaining the relative ease with which it managed to farm in as operator to three small fields in Gujarat by buying out Niko Resources for $5.49m.

Formal Indian government approval on 24th March gave Oilex 45% of the Cambay field with 55% to GSPC. Oilex has also acquired 40% each in Sabarmati and Bhandut with GSPC holding 60%.

What can Oilex do that Niko couldnt Pay more attention to the fields, says McCarthy. Nikos focus was always Hazira because it is such a good field.

They struggled to manage the other fields. But India has changed.

Over the last ten years it has become easier to operate here. McCarthy should know.

Between 1996 and 2000 he was Cairn country manager at a time when most explorers broke into a cold sweat at the though of working here. Cambay has already proved to be a good investment for Oilex with more than expected in-place reserves.

Expect more good news after a 80-sq km fresh 3D and two firm wells and one optional well programme. Five drilling locations have been identified, says McCarthy.

We might do 50% of the seismic pre-monsoon and the rest after. McCarthy hopes to submit a full development plan to the DGH by the end of the year.

Current production at Cambay, Bhandut and Sabarmati is nominal and intermittent at between 20-100 b/d. Niko believes several wells on Cambay can produce 100 b/d each, adds McCarthy.

For a small company like ours that can make a big difference.

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