The Hindu Business Line : Essar Oil may have struck mid-sized reserve in Mehsana

Essar Oil holds 70 per cent operating interest in the 574-sq. km. onshore block in the Cambay basin. ONGC is a natural partner with 30 per cent stake.

According to sources close to the development, the in-place reserve is identified to be in the region of 18 million barrels of oil equivalent. The recoverable reserve is reportedly pegged at 2.7 million barrels of oil equivalent.

The company is expected to submit a detailed development plan of the reserve for approval of the Directorate-General of Hydrocarbons (DGH) shortly. Discussions are also under way for the crude offtake plan.

Sources said that the Management Committee - under the purview of the Union Ministry of Petroleum and Natural Gas - has approved the find as a `commercial discovery'. Apart from Essar Oil, the committee constituted representatives of ONGC and Directorate-General of Hydrocarbons (DGH).

When contacted the Director-General of Hydrocarbons, Mr V.K. Sibal, expressed his inability to make any immediate comment on the issue as the particular management committee meeting was held a few months ago.

According to sources, the company expects to start production of 50 barrels a day from the existing two wells (ESU1 and ESU2). The production is expected to increase with drilling of more production wells.

While nature of crude at the particular prospect is not known, according to oil industry sources, Mehsana crude is generally considered of a quality similar to Arab Light. Unlike the Assam-Arakan basin, crude is generally available in Cambay basin at a shallow depth and requires drilling of a larger number of production wells.

Essar-ONGC consortium has signed the product-sharing contract (PSC) for the said block in July 1998. The first phase of exploration drilling was completed in June 2005 followed by appraisal drilling.

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