Why Premier pulled out at the last minute

Vol 5, PW 7 (23 May 01) Exploration & Production

One of the biggest surprises of the last licensing round was a decision by Premier Oil of the UK not to bid.

A senior Indian oil ministry official tells this report he is disappointed with Premier, particularly since it gave him a personal assurance that it would participate. More, Premier was one of the few companies that bought data for a shallow water block offshore West Bengal, a positive signal.

So what went wrong Well, Petrowatch learns Premier fully intended to bid - but that an embarrassing blunder at head office in London forced it to abandon plans two days before submission. On 29th March, Premier's managing director Charles Jamieson and other directors heard a technical presentation by technicians hired from outside.

During the presentation, one sharp-eyed observer questioned data about the source rock potential of the block. "There was a major error in the calculations," reveals a source.

"This had a direct bearing on how the block was perceived." Angry at "this expensive blunder", Jamieson, a finance man and unfamiliar with the technicalities of basin modeling, fired off a simple question: "Will you get oil and gas from this block If yes, then bid, if no, then don't bid." No one gave Jamieson the assurance he wanted. Result: the bid was cancelled at the last minute.