Cambay blues for Canadian explorer Primera

Vol 14, PW 10 (04 Nov 10) Exploration & Production

Let’s play a game called Indian bureaucracy.

The first one to do anything correctly loses. Canadian minnow Primera Energy Resources is learning this the hard way at its 257-sq km NELP-VII block CB-ONN-2005/11 in Gujarat.

PETROWATCH learns the Alberta-based explorer received a Petroleum Exploration License (PEL) for the block from state authorities only in September this year, nearly two years after the PSC was signed on December 22, 2008. “If we hadn’t persistently followed up,” says a consortium source, “I doubt we would have got the PEL even in September!” No reason was given for the delay – surprising, as the Gujarat government is relatively efficient compared to other states.

But poor Primera still can’t begin exploration, as the PEL, for some strange reason, has been granted for just 214-sq km and not the 257-sq km originally awarded under the PSC. Primera and its partners were unpleasantly surprised when they examined the PEL coordinates carefully and realised that Gujarat authorities had unilaterally omitted a 43-sq km patch of land near Bharuch city.

“We have written letters to them (Gujarat authorities) pointing out the omission,” adds our source, “and are asking for the entire block area to be covered by the PEL.” There has been no response so far but the consortium is adamant it won’t begin work unless the PEL is corrected.

It also believes the clock should stop on its Minimum Work Programme commitments at the block until then. Primera operates CB-ONN-2005/11 with a 10% stake while Quippo holds 40%, Quest Petroleum holds 20%, Vectra Investments holds 10% and Quippo’s parent company SREI holds 20%.

In Phase-I, the consortium has committed to shoot 2D across the entire block and to drill 15 wells. Each well will be drilled up to 3700 metres depth or ‘Cretaceous era sediments’.

In India, operators cannot begin any physical work at a block without a valid and accurate PEL.