Tullow's frustrating experience at CB-ON/1

Vol 6, PW 25 (26 Feb 03) Exploration & Production

OF THE three blocks in which it is further diluting equity, Tullow has had a particularly frustrating experience at CB-ON/1.

This onshore Gujarat block covers an area of 5,875-sq km and was awarded to US company Okland Oil during the seventh round of bidding. A PSC was signed on 16th July 1998 but till date the crucial Petroleum Exploration Licence has not been awarded.

"We've never had a straightforward answer why no PEL has been awarded." The real reason: a dispute between Gujarat and Delhi over rights to possible Coal Bed Methane reserves in the block. Deadlock on this issue has resulted in a stalled work programme.

Equally important, Okland cannot proceed with the assignment of its 90% stake to Tullow. Nor can Tullow assign a part of its stake to Reliance.

When these assignments are completed, Reliance (operator) will hold 40%, Tullow 50% and Okland 10%. In recent days though, Gujarat officials have offered a ray of hope.

Energy secretary Dr Manjula Subramanian tells this report that the CBM row is resolved. "We have withdrawn our gazette notification," said Subramaniam.

Fine, but Tullow is yet to get its PEL. Read below for status of Tullow's India blocks.

Status of Tullow exploration blocks in India (20th February 2003) Block Area(km2) State Consortium Comments KG-ON/1 4,810 Onshore Andhra Pradesh Tullow (60%) Reliance (40%) Seismic survey ongoing GK-OSJ/1 951 Offshore Gujarat Tullow (25%) ONGC (25%) Reliance (50%) Currently in Phase II. Wellbeing drilled CR-ON-90/1 2,570 Assam Tullow (25%) Essar Oil (55%) HOEC (20%) Assignment from Tullow to Premier underway AA-ONJ/2 1,595 Assam Tullow (60%) ONGC (40%) PSC to be finalised.

GK-OS/5 5,000 Offshore Gujarat Tullow (50%) Reliance (40%) Okland (10%) Planning for exploration well underway CB-ON/1 5,875 Onshore Gujarat Tullow (50%) Reliance (40%) Okland (10%) No PEL pending outcome of CBM dispute between Gujarat and Delhi GK-ON-90/2 4,920 Onshore Gujarat Tullow (50%) Reliance (40%) Okland (10%) Seismic/gravity survey being planned