Two Gujarat blocks dropped from CBM round

Vol 5, PW 5 (25 Apr 01) Exploration & Production

Surprisingly absent from the list of CBM blocks above are two from Gujarat: CB-CBM-I and CB-CBM-II, with estimated reserves of 2.29 trillion cubic feet and 2.59 tcf respectively (Source: DGH).

Oil minister Ram Naik gave only the slightest hint why they were not included in this round. He said Gujarat is the only state in India where CBM blocks might possibly contain crude oil.

For this reason, said Naik, the two blocks had been withdrawn from the round. "This is a technical matter," Naik tells Petrowatch.

"Experts are working on it and we are waiting for their report. The blocks will be tendered at a later date." The real story is much different.

We understand that the two CBM blocks in Gujarat fall within or straddle a 5,875-square km exploration block already awarded to Tullow Oil of Ireland: CB-ON-I. Under the PSC, Tullow is excluded from CBM rights, and only has crude oil rights.

More, it has little interest in or understanding of CBM. Curiously, Tullow is disappointed that the government has decided to drop the two Gujarat blocks from the round.

"They are pushing the problem under the carpet," the company tells Petrowatch. "We would have preferred that they were included so we could bid jointly with someone who has CBM experience and resolve this issue once and for all."