State-owned oil and gas exploration firm Gujarat State Petroleum Corporation (GSPC) is seeking partners for nearly 20 onshore blocks. It has entered into preliminary agreements with close to eight firms to review the data of the blocks, two officials privy to the development told FE.
Of the 22 blocks on offer for partnerships, 16 are producing hydrocarbon. Nearly eight firms including the UK’s Magna Energy, Essar Oil, Tata Petrodyne, IOC and Bharat PetroResources, among others, have signed non-disclosure pacts with GSPC to study the geological data of the blocks, said one of the officials, who did not wish to be named.
The firms would be offered ‘participating interest’ under the existing production sharing norms. The producing blocks are mature and in need of technical assistance to make hydrocarbon flow from them. This is why GSPC wants to farm out to partners who could bring technical expertise, said another official.
The final decisions of the partners would be decided by way of bidding and are likely to be finalised by December. GSPC has roped in consultancy firm EY for the job.
This partnership is in addition to one where central government-owned ONGC and GSPC have signed an initial pact that would pave the way for ONGC buying a majority stake in the latter’s 1,850 square km KG Basin offshore block, KG-OSN-2001/3.
In FY16, GSPC reported total revenues of Rs 10,724.97 crore, on which it recorded a loss before tax of R875 crore and net loss of Rs 804.42 crore. The loss was because of adverse impact on profitability due to writing off exploration cost, impairment of producing properties due to lower oil and gas price.
Of the producing GSPC-operated blocks in FY16, the Ingoli and Sanand East field of Ahmedabad block were producing 725-750 barrels of oil per day (bopd); 200-250 bopd and 25,000-30000 cubic metres of gas per day was produced from the Tarapur block.
In the case of non-operator blocks of GSPC in FY16, Karannagar, Vadtal, Dholasan, Allora, Kanawara, North Karhana, Hazira and Dabka were producing hydrocarbon.
GSPC said in its last annual report that oil and gas volumes, which depend on the yield from the company’s producing fields, have a significant impact on its results of operations. “Currently, all of our producing fields are within the Cambay basin, where compact holds participating interests in 16 producing fields,” it said.
The Cambay basin is a maturing resource province with declining production levels, particularly of natural gas. GSPC intends to continue exploration activities in its existing exploration blocks to discover new oil and gas reserves for development. “The company’s future production will be significantly dependent upon success in finding and developing new reserves in a timely and cost effective manner,” said the annual report.