Page 7 - AsiaElec Week 01

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ONGC wins seven onshore blocks
INDIA
INDIA’Sstate-ownedOilandNaturalGasCorp. (ONGC) has won all seven onshore exploration blocks that were offered in the country’s fourth Open Acreage Licensing Policy (OALP-IV) bid round.
Indian Minister of Petroleum and Natu- ral Gas Dharmendra Pradhan said the blocks, which span 18,510 square km, had a resource potential of around 33bn barrels of oil equivalent (boe). Five blocks lie in the Vindhyan Basin, one is in the Bengal Purnea Basin and the last is in the Rajasthan Basin.
“With the culmination of the fourth bid round today [January 2], we have awarded 94 blocks under the [OALP] exploration policy in a very short time span of two and a half years. These 94 blocks cover an exploratory area of approximately 136,800 square km over 16 Indian sedimentarybasins,”theministersaid.
OALP was launched in June 2017 to replace the New Exploration Licensing Policy (NELP) in an effort to boost interest in the country’s upstream and turn around a multi-year slide in oil production. However, this most recent round only attracted a total of eight bids, with state-run Oil India Ltd (OIL) competing unsuccessfully for the Rajasthan block.
India’s first bid round under OALP attracted 110 bids for 55 blocks, the second round drew
33offersfor14blocksandthethirdgarnered42 bids for 23 blocks.
Pradhan said work commitments for the 94 blocks would generate $2.35bn worth of invest- ment in exploration activities over the next three to four years.
OALP-IV used criteria introduced in Febru- ary 2018 to determine the winning bidders, with the government emphasising the importance of work commitments when selecting successful bids. Winning bids for the blocks in Vindhyan and Bengal Purnea, which are classified as Cat- egory-II and Category-III respectively, were selected on the basis of the size of their planned exploration programmes rather than the amount of production offered to the state. Category-II and III basins are defined as having seen little to no exploration. The winning bid for the block in the already producing Rajasthan (a Category-I basin) was also selected based upon its explora- tion programme.
Pradhan said the government had received expressions of interest (EoIs) for as much as 20,000 square km of acreage during the prelimi- nary cycle of OALP-V, which closed on Novem- ber 30, 2019. These EoIs will form the basis of the blocks offered during the bidding stage.
The preliminary cycle of OALP-VI is cur- rently open, and will close on March 31.™
Niko exits India’s deepwater KG-D6 block
INDIA
CANADIAN independent Niko Resources has exited India’s deepwater KG-DWN-98/3 (KG-D6) block after settling its arbitration case against partners Reliance Industries Ltd (RIL) and BP. Under the settlement, RIL and BP have agreed to pay the Canadian junior $36mn for its 10% stake in the block, raising RIL’s stake to 66.67% from 60% and BP’s interest to 33.33% from 30%.
Niko said late last month that the settlement was subject to certain conditions and that the net proceeds from the transaction would go towards paying down its debt.
The independent instigated arbitration after RIL and BP asked the company to exit KG-D6 following a default on a cash call. The two sen- ior partners asked Niko to relinquish its stake in December 2018 and sought approvals from upstream regulator the Directorate General of Hydrocarbons (DGH) and the Ministry of Petroleum and Natural Gas to assume full con- trol of the block.
Niko, which had been trying to sell the stake for several years at that point, responded by filing
for arbitration under the rules of the London Court of International Arbitration.
Upstream reforms in India have seen RIL and BP unveil ambitious investment plans for the deepwater, which have overstretched the inde- pendent’s limited financial resources.
RIL and BP are spearheading a INR400bn ($5.6bn) development programme in KG-D6, which is targeting the R-Series, Satellite clus- ter and MJ discoveries. All three projects are expected to deliver 1bn cubic feet (28.32mn cubic metres) per day of new production by 2022. R-Series is projected to enter production this year, with Satellite set to come online in 2021 and MJ due to come on stream in 2022.
Niko revealed in November 2018 that it had chosen not to meet its investment obliga- tions after failing to securing funding for the developments.
“To conserve its remaining cash (approx- imately $3.6mn as of September 30, 2018), the company elected not to pay a D6 Block cash call that was due in early October, 2018,” Niko said at the time.™
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