The ministry for petroleum and natural gas has started proceedings for the termination of a production sharing contract with Okland International LDC of the US.
The petroleum ministry is consulting the law ministry on the ways to terminate the contract which was signed for exploration in the 2988 sq km AA-ON/3 block in Tripura. The contract was signed on July 16, 1998.
After the signing of the contract, Okland is understood
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to have lost interest in the
block.
It has not undertaken any activity to acquire the contracted 600 line km of 2-D seismic date in Phase I of the exploration.
According to the petroleum ministry, Okland has not even furnished the bank guarantee so far. Officials say that the ministry is expected to issue the contract termination notice to Okland shortly.
On July 16, 1998, the government had signed production sharing contracts for six other oil exploration blocks also. Four of these blocks were onshore and two offshore.
Okland had bagged four of these blocks while two blocks had gone to a consortium of Tullow Oil Plc of Ireland and Larsen & Toubro. One block had been awarded to Essar Oil Ltd.
The seven blocks awarded on July 16,1998, covered an area of 25,070 sq km and the total expected exploration investments in these areas was expected to be about $ 80 million with a minimum commitment of $ 25 million in the first phase. Additional investments in these acreages was to depend on the results of exploration.