Shirish Nadkarni
OGJ Correspondent
MUMBAI, June 17 -- Indian state-run Oil & Natural Gas Corp. is said to be cool towards OAO Gazprom's offer of a 50% stake in its shallow-water exploration property NEC-OSN-97/1 in the country's North-Eastern coast, off the Orissa coastline.
A consortium of Gazprom and GAIL (India) Ltd. acquired the block during the first round of bidding under the new exploration licensing policy (NELP-I) in 1997. However, GAIL surrendered its 50% stake in the block after the consortium hit two dry holes last year.
Following GAIL's exit, Gazprom approached ONGC with a farm-in offer in December 2007. Both companies had previously entered agreements to jointly explore oil and gas fields in India, Russia, and third countries.
While ONGC sources maintain Gazprom's proposal is still under consideration, industry sources close to the development said the Indian E&P major had been having a frustrating time and little success while exploring oil and gas in a Bengal offshore block (WB-OSN-2000/1) bordering the Gazprom asset.
Another major factor in the way of ONGC joining the block was lack of time for completion of the work program. Having signed the production-sharing contract in October 2000, Gazprom is said to be attempting to push back the end of the scheduled period for completion of activities in the block.
Apart from challenging work conditions and a narrow weather window, the drilling results in both the NEC-OSN-97/1 and WB-OSN-2000/1 blocks were primarily identical.
While it is not yet known if Gazprom will relinquish the block, sources say the Russian company is yet to initiate any campaign for drilling on further locations in the exploration asset.
