OKLAND OIL ON 90 DAY DEADLINE FOR BANK GUARANTEE

Vol 3, PW 14 (04 Aug 99) Exploration & Production
     

Okland Oil - a US explorer based in Oklahoma - has narrowly avoided being stripped of its PSC for the AA-ON/3 concession in Tripura.

This report learns Indias Ministry of Petroleum & Natural Gas is set to serve a 90-day notice on the company to come up with a bank guarantee for its work programme or face the prospect of a cancellation of the PSC. A source in the oil ministry tells this report the notice will be served in the first two weeks of August.

The PSC was signed between Okland and the Indian government on July 16th last year. It now appears the oil ministry is reluctant to cancel the contract for administrative reasons and is ready to give Okland one last chance.

A source in the ministry stresses there is unhappiness at Oklands behaviour. "A bank guarantee is normally presented 45 days after signing of a Petroleum Exploration Licence (PEL)", he says, "It has now been six months since the PEL was issued and we still dont have a bank guarantee".

Much pressure has been put on the oil ministry by Pabitra Kar, Chief Minister of Tripura. In June, Kar held a meeting with oil ministry officials in Delhi, demanding that the PSC with Okland be cancelled.

Kar told a correspondent for this report Okland has neither set up an office in Tripura nor set out a work programme. He expressed a wish that the block be handed over to ONGC or re-tendered.

Okland, meanwhile, defends its delay over the delivery of a bank guarantee. It tells this report it is in talks to set up an exploration consortium for AA-ON/3.

Okland is presently confident it can meet the Indian government's 90-day deadline to furnish the guarantee. TABLE: Activity chart of Oklands assets in India Block Area (sq km) State Round PSC date GK-ON-90/2* 4,920 Gujarat 4th 16/July/98 Status: No activity.

Petroleum Exploration Licence (PEL) awaited from state government of Gujarat for same effective block boundary as in PSC. GK-OS/5 5,000 Gujarat 5th 16/July/98 Status: Old ONGC Data re-processing underway.

Application made to government to transfer operatorship to Tullow. CB-ON/1 7,390 Gujarat 7th 16/July/98 Status: No activity.

Petroleum Exploration Licence (PEL) awaited from state government of Gujarat. AA-ON/3 2,998 Tripura 7th 16/July/98 Status: No activity.

See above.