Indian oil company gives up exploration block in US

Friday, 21 January 2005, 08:00 Hrs
Printer Print Email Email
NEW DELHI: Oil India Ltd (OIL), that contributes over 10 percent of the country's domestic oil production, has given up an exploration block in the US that was not fetching results.

"We relinquished the Louisiana exploration block as no more encouraging prospects could be found after the initial encouraging results," Samaresh Kumar Patra, OIL director exploration and development said.

State-owned exploration major ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corporation (ONGC), had originally acquired participating interest in North Hell Hole Bayou Prospect in Louisiana state through its wholly owned Texas-based subsidiary Sakhalin India Inc.

Subsequent to acquiring equity stakes in exploration blocks in Sudan in March 2003, OVL sold Sakhalin India Inc to OIL, another state-owned firm, and with it the 10 percent stake in the US-based McAlester Fuel Company operated North Hell Hole Bayou Prospect in the Vermillon Parish in offshore Louisiana was also transferred.

This move was undertaken by OVL to avoid any class action suit in the US in the wake of economic and diplomatic sanctions by the US against Sudan. A class action suit could have jeopardised OVL interests and the 10 percent participating interest in the Louisiana block may have run into a dispute.

"The exploration work in the prospects after the second well, which gave encouraging results, did not hold out more encouraging prospects so along with the operator we relinquished the block around four months back," said Patra.

"We had paid $7 million to OVL to acquire participating interest in the Louisiana block. The last well we drilled there was found to be dry so all the companies involved jointly relinquished the block," he said.

Under a memorandum of understanding, OIL has been joining hands with OVL in some of its overseas ventures including in two of the exploration blocks and a pipeline project in Sudan. The two companies have got equity stake in an exploration block in the Ivory Coast with OIL holding 11.5 percent stake and big brother OVL having got 25 percent stake.

Patra admitted that so far OIL's overseas quests "have not been paying off well."

Producing around three million tonnes out of India's total production of around 33 million tonnes, OIL has also joined hands with state-owned refining and marketing major Indian Oil Corporation (IndianOil) and is participating in exploration efforts in Iran.

Together with IndianOil, OIL is putting in bids for stake in an exploration block in Libya, where India has already acquired stake in two blocks.

Import-dependent India has so far acquired oil equity or participating interests in a dozen countries including Russia, Myanmar, Sudan and Iran.

"We are keen to acquire stakes or participation interest more in explored fields but what is available are mostly marginal or depleting fields, which would be much too expensive to work on. We are now looking at prospects in Libya and Myanmar among others together with IndianOil," said Patra.

Source: IANS
Ola raises Rs 400 cr for electric
Leading ride-hailing cab aggregator Ola on Friday said it raised Rs 400 crore from its early in..
SpiceJet plans aggressive
Budget passenger carrier SpiceJet plans to aggressively expand its international networks to fl..
Fossil Group sells smartwatch
Global watch and accessories maker Fossil Group has announced to sell its smartphone technolog..
GST rate cut to spur Bengaluru
The realty market in India's tech hub is set to grow as lower Goods and Services Tax (GST) rate..