The Hindu Business Line : Essar Oil may report oil find next week

Essar Oil may announce its first oil strike next week. The announcement may coincide with the inauguration of the company's refinery at Vadinar in Gujarat. According to sources, it has completed its second phase of exploration drilling at Mehsana in Gujarat and has submitted the findings for evaluation by the Directorate-General of Hydrocarbons.

Essar Oil holds 70 per cent operating interest in the 574 sq. km onshore block with ONGC holding the other 30 per cent. The sources said that the DGH had asked both the equity partners in Mehsana to join in a meeting next week before finalising the evaluation report.

Having signed the product sharing contract way back in July 1998, Essar completed the first phase of exploration drilling, unsuccessfully, in June 2005. Though existence of heavy oil and associated gas were noticed in two of the wells, production could not be established on a sustainable basis. In the second phase of the work programme, the company drilled another three appraisal wells to establish the presence of recoverable oil reserves.

Essar Oil has said it is on track to commission the 7.5-million-tonne refinery at Vadinar — to be expanded to 10.5 million tonnes by March 2007 — by the third week of November. The company has already procured four million barrels of crude oil, the last consignment of which was received on Saturday.

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