The Hindu Business Line : Gujarat State Petro steps up drilling at KG basin

The state-owned Gujarat State Petroleum Corporation (GSPC) has acquired second rig Atwood Beacon to expedite exploration drilling at its Krishna Godavari basin block, KG-OSN-2001/3. Slated to drill six more exploration wells in the block in 2007, GSPC is expecting the third rig to join the project in July 2007.

GSPC has so far drilled five exploration wells in the block with the sole drill ship Saipem's Perro Negro 3. According to available information, the second rig Atwood Beacon was delivered at least three months behind schedule and will cost over $100,000 per day.

The company has already announced a rich find in the block. According to the revised schedule, the field will be brought into production in phases beginning late 2008 or early 2009. The initial production is pegged at 9-10 million standard cubic metres a day (mscmd).

GSPC holds 80 per cent operating interest in shallow water of the block.

A senior company official said that despite the company's best efforts to monetise the gas as early as possible, the worldwide rig shortage has impacted the development plan. Earlier, GSPC had planned to bring the field into production beginning end 2007.

The official, however, stressed that the project is well on course as per the product-sharing contract signed in 2003.

"It is a rich find. We need to drill adequate number of wells first for preparing a sound development plan," he said, adding that with the second rig on fray the company was confident to submit the development plan to the Directorate General of Hydrocarbons before March 31, 2007.

Commenting on apprehensions about the expected production from the field, sources said that from the available drilling results suggest a peak production rate of 40 mscmd.

Meanwhile, the company is yet to complete the testing of the fifth well (KG-15). The process to appoint the lead manager for the scheduled IPO in the first half of 2007 is yet to be completed. Four merchant bankers have already been submitted for the same.

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