Australian oil and gas explorer Oilex Ltd has declined the right of first refusal (ROFR) over the 55 per cent participating interest held by Gujarat State Petroleum Corporation (GSPC) in the Cambay Production Sharing Contract (PSC).

With the ROFR now declined by Oilex, GSPC can now move forward to execute the final sale agreement with the preferred bidder for its 55 per cent stake and make the applicable submissions to the government.

GSPC had opened the bids received for its participating interest and invited the preferred bidder to finalise negotiations.

“This places us a step closer to realising the potential that has long been recognised in the Cambay project. Oilex has been striving to regain traction on a new programme of drilling the EP-IV gas sands and looks forward to a new partner entering the project,” Oilex Managing Director Joe Salomon said in a statement.

Oilex-GSPC settlement

In September 2019, Oilex reached a settlement with GSPC to resolve the ongoing Cambay PSC dispute, whereby GSPC undertook to use its best endeavours to complete the sale process of its participating interest within 90 days from commencement of the process - September 26, 2019.

Pursuant to the settlement, the Event of Default and Event of Withdrawal, which had been made by Oilex with regard to the Cambay Field Joint Operating Agreement were withdrawn and the arbitration proceedings, which had been lodged by GSPC with Singapore International Arbitration Commission, were terminated.

Besides, a stay order granted by the Gujarat High Court was removed.

The Cambay project is Oilex’s Indian flagship asset located in Gujarat. The successful commercialisation of the Cambay Field will allow Oilex to capitalise on the large and growing natural gas supply-demand gap in the state of Gujarat, the company said.

Oilex became one of the first foreign companies into the basin when it farmed into a PSC with Niko and GSPC in 2005 as an operator with a 45 per cent participating interest.

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