The Hindu : Business : GAIL strikes oil in Gujarat

Online edition of India's National Newspaper
Friday, Sep 10, 2004

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Business

GAIL strikes oil in Gujarat

By Our Special Correspondent

NEW DELHI, SEPT. 9. GAIL India which has struck oil in the Cambay Basin in Gujarat says this has opened up opportunities to go into oil transportation and marketing. The public sector company which plans to invest Rs. 600 crores in exploration and production over the next three years, says it continues to receive encouragement to remain in the upstream area despite recent comments by the Union Petroleum Ministry over the need for oil companies to remain within their areas of core competency.

Addressing a press conference here today, GAIL Chairman, Proshanto Bannerjee, said talks were also under way with the Myanmar Government for acquiring a stake in a new offshore exploration block, A3, while business opportunities were being explored in Iran, Egypt and the Philippines.

As for the present oil discovery, he said it was the first time that GAIL had found oil raising prospects of laying a pipeline for transporting the crude oil as well as for marketing this equity oil. The find has been made in the Cambay basin in Gujarat. The recoverable reserves based on initial test results are estimated at about ten million barrels with an upside potential of 50 million barrels. Mr. Bannerjee said this translated into 5-6 lakh tonnes of crude oil availability from the time commercial production begins in 2005 for about 10 to 12 years.

The other partner in the block is Gujarat State Petroleum Corporation (GSPC). This is the sixth well drilled in a 1,424 sq km block under a joint venture agreement between GAIL and GSPC. GAIL today also signed two joint operating agreements for exploration and production in the NELP IV block. The first agreement was signed with Enpro Finance for the Tripura block in the Assam-Arakan basin. GAIL has an 80 per cent participating interest in this block.

The second agreement was signed for Cauvery basin block in Tamil Nadu.

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