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Pratim Ranjan Bose

Kolkata June 8 Essar Oil will start producing 500 barrels a day from two wells at Mehsana in Gujarat beginning tomorrow. Production will reach 1,000 barrels a day in next three four months following drilling of two more development wells. The crude will be supplied to Koyali refinery of IndianOil.

The company has struck oil at two wells at prospect B in CB-ON/3 pre-NELP block in Mehsana in 2006. The recoverable reserve is estimated at 2.7 million barrels. This was Essar's first oil strike.

Company sources said that the management committee, under the purview of the Directorate-General of Hydrocarbons (DGH), has given its formal approval to the filed development plan on June 8.

"Parallel to the production plan, we have launched 3D seismic survey of an additional 145 sq. km area within the block. The results of the survey are now awaited, depending on which we will drill other prospects - if any - in the block," a senior company official said.

According to industry sources, Mehsana crude is generally considered of a quality similar to Arab Light with a relatively high residue content.

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.

Meanwhile, the company has secured a six months extension of its phase-I coal-bed methane (CBM) exploration programme at the Eastern Ranigunj (CBM) block in West Bengal. The programme is now scheduled to end in September 2007.

According to sources, the company has completed drilling of 10 core holes and will drill two more core hole and multilateral wells during the remaining period of phase-I.

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Essar Oil starting production from Mehsana wells

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