Gazprom production sharing contract with GAIL

Vol 4, PW 18 (11 Oct 00) Exploration & Production
     

Despite the best efforts of Indian officials to hype the visit of Russian president Vladimir Putin, his stay here between October 2nd and 5th passed off virtually unnoticed - a stark contrast to the rapturous welcome for US president Bill Clinton back in March.

But for Gas Authority of India, Putin's visit provided an ideal backdrop for its formal entry into India's upstream sector. On 3rd October, GAIL signed a production sharing contract for a 10,425-sq km shallow water concession offshore West Bengal (NEC-OSN-97/1) with Gazprom.

A spokesman at GAIL tells Petrowatch the PSC envisages an "unincorporated joint venture" with Gazprom as operator. A press note issued after the signing ceremony at Hyderabad House in Delhi said development of the offshore concession, awarded in January under the New Exploration Licensing Policy, would be carried out in three phases at an approximate cost of $35.49m: PHASE 1: Reprocessing 1,500-sq km of exisiting data at a cost of $920,000 within two years of the joint venture becoming operational PHASE 2: Acquisition of 1,500-sq km seismic and drilling of one 6,500-metre exploration well within three years at a cost of $16.7m PHASE 3: Acquisition of 2,000-sq km 3D seismic and one 6,500-metre exploratory well within two years at a cost of $18m At a press conference GAIL chairman CR Prasad said the two companies would jointly examine blocks offered under the second round of NELP to be announced later this year.

By contrast Gazprom chairman Viakhirev Ivanovich was more circumspect. "We shall study projects offered before taking a decision on the issue," he said.