US company expected to help double recovery from the block, in return for up to 20% of profits, say sources.
Gujarat government-owned Gujarat State Petroleum Corporation (GSPC) plans to bring in US-based Schlumberger, a leading oilfield service provider, as a partner for its Tarapur block in the proven petroliferous Cambay basin.
GSPC, in association with Hindustan Oil Exploration Company (HOEC), was awarded the Tarapur exploration block by the Government of India in 2000. Later, HOEC withdrew its stake and GSPC now holds 56 per cent participating interest in the block as a operator. ONGC holds 30 per cent and the rest is with Canda-based GeoGlobal Resources.
The hydrocarbon block currently produces about 300 barrels of oil per day from Tarapur-1.
The company has got the necessary approvals from the Directorate General of Hydrocarbons (DGH), sources said. The exploratory block is spread over 1,618 sq km, and the investment in drilling till date has been about $100 million (Rs 450 crore), according to government sources.
“Schlumberger will work as a part of GSPC and will share risks and rewards for the Tarapur block. The share in the profits could be in the range of 10-20 per cent, the final decision for which is pending with GSPC,” said industry sources familiar with the development.
A GSPC spokesperson declined to comment, as they were under a ‘silent period’ under a Securities and Exchange Board of India directive. GSPC is in the process of coming up with an initial public offer, with an aim to garner Rs 3,000 crore. The issue is likely to hit the capital markets later this month.
The block holds the equivalent of about 700 million barrels (a barrel of crude oil is 157.5 litres), of which 20-25 per cent is believed to be recoverable. “With Schlumberger as partner, the recovery can be maximised up to even 50-60 per cent,” said sources.
When asked, a senior official of Schlumberger refused to comment.
