ONGC Wins Authorization To Work Alone In Cambay Onshore Block CB-ONN-2002/1, India

Oil and Natural Gas Corporation Limited (ONGC) has received consent from the petroleum ministry to work alone in the Cambay onshore block CB-ONN-2002/1 after Cairn India Limited pulled out from the production sharing contract (PSC), IndianPetro reported. ONGC also got the permission to carry on with a fresh appraisal programme for the WP-3 discovery in the block.

Cairn submitted a detailed note to the government explaining its reasons to quit the acreage including the lack of interest in the non-commercial size discovery made in the block, senior petroleum ministry sources said.

ONGC will now obtain a 100% interest in the block whereas it previously had only 70% stake in the block.

Cairn India has frequently rejected operating committee (OC) and management committee (MC) decisions for the start of an appraisal programme on the WP-3 discovery without signing them, as it did not consider the production of 2.8 to 2.5 m3 of crude oil a day from the WP-3 to be enough for warranting further exploratory activities in the block.

In November 2008, Phase-I exploration in the block expired while an uncompleted minimum work programme (MWP) commitment was still there for drilling two wells to a depth of around 2,100 meters each. ONGC had planned a 12-month extension of the phase in order to complete the MWP (now allowed), but Cairn India had rejected to sustain the offer at the operating committee level.

During the extended extension period, Cairn India also declined to sign a separate operating committee (OC) declaration for drilling one appraisal well and another well as part of an additional work programme, as per the PSC.