BPCL to pick up 25% in North Sea blocks
Bharat Petroleum (BPCL) will pick up a 25% participating interest in blocks 48 1B and 2C in the Southern gas basin of the North Sea.
By Cuckoo Paul, TNN |
MUMBAI: Bharat Petroleum (BPCL) will pick up a 25% participating interest in blocks 48 1B and 2C in the Southern gas basin of the North Sea.
The company joins a consortium led by Australian firm Encore Oil and UK company Norwest for a consideration of about Rs 55 crore, sources close to developments said. The move will give the Indian oil major exposure to near term drilling opportunities in the region, which is among the most explored in the world.
The blocks are in close proximity to a number of producing gas fields and their associated infrastructure makes even moderate gas reserves very commercial, the sources said. The North Sea contains the majority of Europe’s oil reserves and is one of the largest non-OPEC producing regions in the world.
While most reserves lie beneath waters belonging to the UK and Norway, some fields belong to Denmark, the Netherlands and Germany. To take forward its interest in prospecting for oil and gas, BPCL has recently formed an upstream subsidiary Bharat Petro Resources with an authorised capital of Rs 1,000 crore.
Speaking to the media after the annual general meeting, BPCL chairman Ashok Sinha said the company has committed to spend Rs 600 crore in four blocks in India and two abroad. It is willing to increase this exposure to Rs 4,000 crore, if and when there is a discovery.
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In India, the company has five blocks, of which two are in deep waters and three on land. Most were acquired in NELP 4 and are in partnership with ONGC and OIL. Prospecting for oil and gas, once the exclusive domain of ONGC and OIL, is now being tried by all three oil refining and marketing companies —IOC, HPCL and BPCL.Apart from the North Sea interest, BPCL also recently took up a 20% stake in the Australian northwest shelf in the Timor sea. It is now part of a consortium operated by Coogee (30.8%), Nortwest (24.1%), Bounty Oil (12.8%) and Adelphi oil (18.4%). Drilling is likely to begin in both the blocks in 2007.
Exploration in the North Sea, a declining field, is now a story of pushing the edges of the technology in terms of maximising production, oil industry sources said. Production fell 12.8% in 2005 leading to Britain becoming a net importer of crude for the first time in decades.
The two blocks 48/1b and 48/2c were awarded in the 22nd Licensing Round as a promoter licence. They contain contain the 48/2-1 gas discovery which was drilled in 1984 and tested 2.7 million cubic feet per day.
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