DGH supports GSPC request to retain all of CB-ON/2

Vol 9, PW 17 (01 Dec 05) Exploration & Production

DGH officials believe Gujarat Petroleum should be allowed to begin Phase-III at CB-ON/2 in Gujarat without relinquishing 50% of the block area, as required by the PSC.

A source confirms the oil ministry has received a DGH request to approve GSPCs wish to hold on to 50% of the block area that technically it should have relinquished when Phase-II ended on 22nd November, in line with the PSC. Advises the DGH: The operator's (GSPCs) request to enter into Phase-III of the work programme without relinquishing 50% of the original block area (809-sq km) and retention of the Phase-II area of 1,211-sq km is recommended for approval.

DGH officials justify their support of GSPCs position with the argument that the whole of the block area has not been fully explored and there is a need to further evaluate existing hydrocarbon prospects. Support for GSPC within the DGH comes following the Gujarat-based operators commitment to shoot additional seismic of between 500-sq km to 1000-sq km and drill one or two additional exploration wells in addition to the existing Phase-III work commitment of one well to a minimum target depth of 3000 metres over two and a half years.

Relations between the DGH and GSPC over this block have not always been so cosy. In March this year the DGH strongly objected to newspaper reports sourced to GSPC of a discovery at the Tarapur-1 well - drilled to 2250 metres - saying there was no recorded evidence of flow to surface.

But GSPC argues that the Tarapur-1 well tested in April did indeed show modest flows of 60 b/d of 42 API grade crude. On 30th October, Dalma Energy rig MR-4 spudded a second exploration well (Tarapur-P) for GSPC some 80-km from Tarapur-1 to delineate the discovery.

Another five drilling locations have been identified.