Oilex of Australia farming in 30% to Cambay Field

Vol 9, PW 11 (08 Sep 05) Exploration & Production

Oilex of Australia is close to acquiring a 30% stake and operatorship of a small gasfield in Gujarat - its springboard into India.

Were exchanging final drafts, the company tells us. It shouldnt be long now.

On 27th July, Oilex, a small explorer listed on the Australian stock exchange, announced a Heads of Agreement with Niko and GSPC for the Cambay Field, where operator Niko holds one-third equity and GSPC two thirds. Work on a formal farm-in agreement and deed of assignment is almost complete and awaiting formal approval by the oil ministry.

Oilex plans a detailed study of existing data to determine the forward work programme for in-field exploration and re-development of the field. Also planned is 3D seismic over parts of this 128-sq km populated block, followed by re-entry of old wells and re-development of new wells.

Our aim is to begin production quickly, we learn. We cant yet say how much gas this block can produce.

Oilex estimates in-place reserves at the Cambay Field to be 39bn cubic feet, based on earlier estimates provided by operator Niko. In 1991 the field was virtually shut in because of sand and water influx and decline in reservoir pressure after producing about 48% of the operators estimated reserve.

Why are Niko and GSPC farming out 30% The field is no longer material to them, we hear. They have bigger and better opportunities elsewhere.

Incorporated three years ago, Oilex has several small exploration permits in Australia and is now trying to enter India. Says the company: Oilex sees this acquisition as the first important step in establishing its presence as an operator in oil and gas exploration and production contracts in the Indian subcontinent.

The objective of this acquisition is to develop a production base in India at the earliest opportunity. In July, Oilex submitted three unsuccessful bids in NELP-V.