November 21, 2008

Essar Exploration bags oil block in Vietnam

Essar Oil Limited recently announced that its subsidiary Mauritius based Essar Exploration & Production Limited has bagged an award for an offshore block in the prolific Song Hong basin in Vietnam for exploring approximately 5,925 square kilometer by the Vietnam government.

The block was offered under the recent licensing round offering 7 offshore blocks. It is a shallow water block with average water depth of 60 to 70 meters. The minimum work program for the block envisages detailed geological and geophysical studies, reprocessing of selected existing 2D seismic data, acquisition, processing and interpretation of fresh 3D seismic of 1000 square kilometer and drilling of two exploratory wells with 3,500 meter target depth. The exploration phase is estimated to last 5 years and the investment would be approximately USD 60 million.

Essar Oil is in the process of consolidating its upstream exploration and production activities under its proposed subsidiary. This will help build a strong, fully integrated oil company with upstream, refining and downstream marketing activities. Once it exercise is completed, Essar Oil will have eight oil & gas blocks and one Coal Bed Methane block. This includes onshore blocks in Madagascar, an offshore block in Nigeria, on shore block in Mehsana in Gujarat, a coal bed methane block at Raniganj in West Bengal, the offshore field Ratna & R series and 2 onshore blocks in Assam.