NTPC to spend $37.62m on new Gujarat block

Vol 13, PW 17 (11 Feb 10) Exploration & Production
     

Better known as India's largest power generation company, NTPC will soon join the ranks of ONGC, Cairn India and Reliance to become an upstream operator when it signs a PSC for the 165-sq km â€کS’ block CB-ONN-2009/5 onland Gujarat.

No firm date is set for when that will happen, but the DGH tells us the PSC will be signed by next month, "at the latest". State-owned NTPC (100%) provisionally won the block on October 12 (last year) in the NELP-VIII licensing round, which saw bids submitted for 36 out of 70 blocks offered.

“NTPC wants to acquire oil and gas blocks to get fuel for its power stations,â€‌ explains an NTPC source. “We will start tendering for seismic, drilling and other services simultaneously.

â€‌ NTPC reckons it will need to drill exploration wells at CB-ONN-2009/5 to between 1000 and 2000 metres depth. First though, it needs a Petroleum Exploration License (PEL) from the Gujarat government, itself no easy task as all operators in India know only too well.

NTPC won CB-ONN-2009/5 against stiff competition from ONGC and Ruia-controlled Essar Shipping Ports and Logistics by committing an aggressive work programme: its total Phase-I investment of $37.62m will be used to acquire 255-lkm 2D, 165-sq km 3D and drill seven exploration wells. As you would expect, NTPC believes CB-ONN-2009/5 "is very prospective".

Essar came a close second with a Phase-I commitment of 500-lkm 2D, 165-sq km 3D and four exploration wells. ONGC came third with 110-lkm 2D, 165-sq km 3D and two exploration wells committed.

Aside from this block, NTPC (10%) is also part of a consortium that has provisionally won the 4007-sq km Andaman deepwater block AA-DWN-2009/13 with ONGC (70% and operator), GSPC (10%) and GAIL (10%). This consortium has committed to acquire 1010-lkm 2D during Phase-I at a cost of $2.32m, but has committed no wells.