• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

New Delhi, Sept. 16 Norwegian exploration and production company Rocksource ASA has signed an agreement with public sector major ONGC to pick up 10 per cent stake in latter’s Cauvery block.

In a statement issued here ONGC said that it has entered into an agreement with the Norwegian company for the deepwater Block CY-DWN-2001/1. ONGC is the operator in the deep water block with 55 per cent participating interest and the other two partners are Oil India Ltd and Petrobras International Braspetro (PIB BV). The block was awarded under the NELP III round.

The farm-out agreement has been signed on Monday by the ONGC Director (Exploration), Mr D. K. Pande, and the Rocksource ASA Chairman, Mr Dag Dvergsten. The agreement to assign participating interest in the block is subject to consent of Oil India and Petrobras International Braspetro and approval of the Government. After assignment of participating interest, ONGC shall have 45 per cent stake in the block, Oil India (20 per cent), Petrobras (25 per cent) and Rocksource (10 per cent).

According to ONGC, the association of Rocksource in the block and application of its proprietary technology is expected to reduce risk association in drilling deep water wells. The technical expertise available with Rocksource would also be used for other exploration blocks of ONGC.

In a statement on its Web site, the Norwegian company said that its investment for the first exploration phase will be approximately $20 million. This covers Rocksource’s equity share of both the block back costs and the first phase work programme (three wells).

The agreement is a continuation of the memorandum of understanding to develop exploration partnerships entered into by ONGC and Rocksource in January 2008.

In a success case where discoveries are put into production, Rocksource will pay a bonus to ONGC in the form of $1 for every produced barrel of oil, and $0.5 for every produced barrel of oil equivalent gas. In case Rocksource decides to exit the Block, ONGC will receive 20 per cent of any gain achieved, it said.

The mean unrisked resources of the exploration block are estimated by Rocksource to be approximately 2.9 billion barrels of oil equivalent (boe). The prospect is estimated by Rocksource to have a mean resource size of approximately 1.6 billion boe and the chance of success is estimated to be in excess of 60 per cent.

The first well is drilling, and is expected to reach the reservoir late this month, and final results are expected in October.

More Stories on : Alliances & Joint Ventures | Petroleum | Oil & Natural Gas Corporation Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line