By an OGJ correspondent
MUMBAI, Nov. 15 -- Canada's Niko Resources Ltd. has discovered natural gas on its block near Surat, Gujarat, India.
The firm has drilled three exploratory wells on the 419 sq km CB-ONN-2000/2 onshore block.
"Of the three exploration wells drilled so far, the first two have encountered hydrocarbons," said an Indian oil ministry official. "The flow rate from Bheema-I, the second well, totaled 16 MMcfd of sweet dry gas.
"However, the exact quantity of the gas is still to be established, but indications are that it will be commercially exploitable. Niko will now drill seven more wells in the block during the current fiscal year."
The Surat block had been awarded to Niko in the second round of bidding under the New Exploration Licensing Policy (NELP-II). The Canadian company has 100% interest in it.
The first of a 15-well onshore exploration and appraisal program got under way on Apr. 16, targeting Miocene reservoir sands analogous to those currently producing at Niko's 1 tcf Hazira gas field, 20 km to the southwest.
"The third well did not encounter economic quantities of gas, and the rig is moving to the fourth location," the ministry source added.
Under terms of its production sharing contract, the company is required to drill 15 wells and shoot 250 sq km of 3D seismic over 2 years.
A second 2-year commitment, which is dependent on the results of the first phase, requires the drilling of five additional wells and the shooting of an additional 50 sq km of 3D seismic. The company is required to return a portion of the block at the end of each commitment phase.
Niko also has a 10% interest in a deepwater block where Indian firm Reliance Industries Ltd. announced recently that it had discovered 7 tcf of natural gas.
