The Assam Co Additional Vice-Chairman, Mr Aditya K. Jajodia, said the company had so far invested Rs 20 crore towards oil exploration and will participate in the next round of NELP.
Kolkata, Oct. 31
THE Rs 119-crore Assam Company Ltd on Monday announced striking of oil in Amguri block in Assam.
The pre-NELP block, which was once abandoned by ONGC, is held jointly by Assam Co and Canada-based Canoro Resources Ltd. Canoro holds 60 per cent operating stake in the block, and the rest is held by Assam Co.
Having pioneered discovery of oil in India through its associate Assam Railway and Trading Company in 1886, the oil business of the company was later nationalised.
Addressing a press conference here on Monday, the Additional Vice-Chairman, Mr Aditya K. Jajodia, said that Canoro Resources Ltd has identified two oil producing zones at the suspended Well No. 5 in Amguri. The production capacity of the well is stabilised at 588 barrels per day of 42 degree API oil with 0.8 million cubic ft per day of associated gas.
"Canoro is focussing on generating cash flow from Amguri field. We expect production to begin in the next three to four months," he said.
At present, the field has eight wells abandoned by ONGC. Apart from Well No. 5, where an in-place reserve is identified, the consortium will explore oil in wells 6 and 7 in the future.
While Well 5 is expected to contribute Rs 20 crore to Assam Co's balance sheet yearly, the company is expecting substantial returns from the field once the full potential is exploited.
Mr Jajodia said the company had so far invested Rs 20 crore towards oil exploration and will participate in the next round of NELP. Apart from Amguri, the company now holds minority (35 per cent) stake also with Canoro (65 per cent) in AA-ON/7 block. This apart, the company holds majority stake in three marginal fields with various partners.
The company has recently appointed PricewaterhouseCoopers (PwC) and Khaitan & Co for studying the proposal to demerge the oil business. "The report will be available in the next few months."
The company is also exploring means to produce medicinal plants and other more profitable crops in additional land available in some of its tea estates.
Net up 4 pc in Q3: The company on Monday announced results for the third quarter ended September 30. Net profit has increased by four per cent from Rs 15.57 crore in the corresponding period of 2004 to Rs 16.22 crore. This is against the 19 per cent rise in gross revenues from Rs 37.95 crore to Rs 45.38 crore.
During the first nine months, the company has registered a net profit of Rs 8.95 crore against a loss of Rs 10.86 crore in the corresponding period of previous fiscal. The company registered a net profit of Rs 11.48 crore and turnover of Rs 119 crore during last year. Assam Co stock opened at Rs 19 and closed at Rs 19.60 on the BSE on Monday. The stock registered a 0.9 per cent rise over the previous closure at Rs 18.70 on Friday.