A Texan 'Wild Cat' comes to Kathmandu

Vol 4, PW 3 (15 Mar 00) Exploration & Production

Is Nepal sitting on a billion barrels of recoverable oil reserves Max Mazy, President of Texana Resources, hair greased back, a true Texan, believes so.

He doesn't tell you who he is talking to, but independent inquiries by Petrowatch uncover it isONGC and Reliance Petroleum, India's two most prominent upstream explorers. Their interest is not surprising.

In December 1998, Texana secured exploration rights to Blocks 3 and 5 in the Chitwan and Nepal Gunj areas of Nepal - two of ten auctioned by the Nepalese government. Only Shell has past experience of the area when it drilled a dry hole near Biratnagar in the middle 80s before pulling out because of a trade dispute between India and Nepal.

Each of Texana's two blocks cover approximately 5,000 square km. Its Production Sharing Agreements (PSA) are unlike any other, with no well commitments, only an undertaking for seismic.

Texana is happy with the deal, citing all manner of geological reasons to back its claim of an undiscovered reservoir on Delhi's doorstep "and a tarmac road to the drill-site". Hardly surprising, ONGC and Reliance want some of the action.

A Source in Delhi tells this report Texana was welcomed by ONGC boss Bikash Bora who personally accompanied Mazy to the office of Atul Chandra, head of the corporation's overseas wing. It is understood ONGC is set to make Texana a formal proposal.

A source in Kathmandu confirms Reliance is also at an advanced stage of talks. It is unclear who will win the race to clinch Texana.

Naturally, Reliance is favourite. Unlike ONGC, the Mumbai-based corporate has no tortuous government approval procedure to block overseas activity.