Geopetrol talks with ETA stall over Arunachal block

Vol 11, PW 25 (01 May 08) Exploration & Production

Seven months is a long time to close a deal for 10% in an exploration block, but not if you are Monaco-based French explorer Geopetrol and Dubai-based ETA-ASCON.

In October last year, Geopetrol and ETA signed an â€کinitial’ agreement where Geopetrol agreed to â€کfarm-out’ 10% of its 30% stake in exploration block AA-ONN-2003/2 in Arunachal Pradesh to ETA, whichhas two onland rigs operating in India for Jubilant Energy and is looking to establish a foothold in the Indian exploration sector.“There is no movement on the deal,â€‌ confirms an industry source.

“It stands where it was back then.â€‌ One reason behind the delay, it seems, is that Geopetrol is waiting for some financial information from ETA, which is yet to arrive.

“Geopetrol is seeking clarifications from ETA on certain financial matters,â€‌ adds a source.“It also wants to know details about the group’s financial stability.

Even the DGH and (oil) ministry would ask for the same details before approving the deal.â€‌Separate inquiries by PETROWATCH show Geopetrol and ETAare locked in disagreement over the money to be paid for the 10% stake in the block and that Geopetrol wants ETA a copy of ETA’s accounts.

Contacted by PETROWATCH, an ETA spokesperson in Dubaideclined to comment.“The deal is not yet concluded,â€‌ he said.

“We will let you know when things move. Let them (Geopetrol) take their own time.

Even we are not in a hurry.â€‌ In January 2007,Geopetrol (30%) issued limited tenders to short list contractors to hirerigs and services for AA-ONN-2003/2, which it shares with NTPC(40%), Canoro Resources (15%) and Brownstone Ventures (15%).

Offers werereceived from biddersbut Geopetrol is yet to finalise a drilling contractor. “We will finalise a drilling contractor in two or three months,â€‌ confirms a Geopetrol source.

“We have also bought equipment like drill bits, tubulars and casings for four exploration wells.â€‌