Geopetrol wants to exit troublesome Arunachal

Vol 13, PW 13 (03 Dec 09) Exploration & Production

Monaco-based French explorer Geopetrol wants to exit the 295-sq km NELP-V onland Arunachal Pradesh block AA-ONN-2003/2, where it is operator with 30%.

Industry sources say that early last month Geopetrol sent a letter to the DGH with its decision. DGH sources could not immediately confirm receipt of this letter, but stressed that operators cannot be changed without government approval.

Geopetrol’s India chief Claude Seiler categorically refused to answer any questions when contacted by this report. But another Geopetrol source tells us the company wants to completely exit the block.

“I have even heard,â€‌ says our source, “that Claude Seiler will relocate to the head office in Monaco by December this year.â€‌ Industry sources explain that Geopetrol is giving up on the block because it is tired of dealing with problems like landslides caused by frequent heavy rains and transportation difficulties due to the lack of good roads.

Geopetrol shares this block with Canada-based Canoro Resources (15%), Canada-based Brownstone Ventures (15%) and India’s largest power company NTPC (40%). Geopetrol’s troubles further multiplied, these sources add, when Canoro stopped paying its share of the costs at the block in October.

Canoro has also apparently been keen to exit the block, we hear, since March this year. In April 2006, Canoro reduced its stake from 30% to 15% by offloading 15% to Brownstone Ventures.

But Canoro denies all claims about it not having paid costs, when contacted, and refuses to answer whether it plans to exit. Meanwhile, a source at Geopetrol says that NTPC and Brownstone continue to pay their share of costs and definitely want to continue at the block.

According to the PSC, an operator must give six months notice before exiting, we learn. Separately, industry sources say JayBee Energy from whom Geopetrol hired a 1500-hp rig to drill four firm wells in July 2008 at $30,000/day has taken the company to court over unpaid bills since March when its rig reached location.