Romania's Petrom wants to sell BB-OS/5
ROMANIAS PETROM WANTS to quit the offshore Mumbai exploration block BB-OS/5 and end its operations in India.
Last month Petrom management in Bucharest decided against 'Phase-III' of the minimum work programme. Petrom will officially tell its partner Essar Oil and the oil ministry at an operating/management committee meeting in Mumbai on 15th January.
Petrom has already started looking for buyers for its 51% stake. Essar has the balance 49% and we understand from reliable sources that it too is anxious to sell and move on.
Petrom has sent letters to about a dozen companies asking for expressions of interest, among them Reliance, HOEC, Oil India, British Gas, Cairn Energy and Hardy. Petrom is clear why it wants to leave BB-OS/5.
"We do not have a financially sound partner to enter 'Phase III' and we do not want to carry the entire risk on our own." Petrom reckons it would have to spend at least $20m to carry 'Phase-III'. Petrom and Essar have so far spent about $13m on the block: about $1m for 'Phase-I', the rest down a dry a hole in 'Phase-II' and on 1,670 km 2D.
Petrom insists its decision is not a reflection on the block. "We still think the block has good potential." 'Phase-II' of the minimum work programme ended on 31st December.
"We will ask the ministry for a grace period of about one or two months so that we can find a buyer and get out. If nobody shows interest we will just walk out.
We want to cut our losses." 'Phase-III' commits two wells to 2,600 metres target depth.