India, with 1.2 billion people representing 17% of the world’s population, is the world’s 5th highest energy user. The upstream sector of the petroleum business in India has historically been dominated by the National Oil Companies. Nine competitive conventional exploration bid rounds have taken place, with some foreign participants. Exploration and production occurs in a number of onshore and offshore basins.
The Assam region has been the location of a number of large oil discoveries and the region remains a core producing area for the country.
The country’s domestic oil and gas production is insufficient to meet the growing demand and the country is ever-increasingly dependent on import petroleum and petroleum products (Figure 1). In order to help minimize petroleum imports, the Indian Government now welcomes foreign participation to help invest in the country’s energy sector.
East West was a successful co-bidder in India’s 9th NELP competitive bid round, winning Block AA ONN 2010/2 in the Assam region of eastern India (Figure 2 and Figure 3). The block covers 495 sq. km. along a prospective oil producing trend in eastern India, not far south from existing infrastructure. The Company’s partners are Oil India (40%, operator), ONGC (30%), and GAIL (20%) with East West retaining a 10% participation interest. Federal approvals have been received for the PSC contract and seismic field work is expected once approval to commence operations is received from the regional Assam Government. The exploration program will include the acquisition of a large 3D seismic program, covering the entire block, followed by the drilling of two exploration wells. The five year exploration program expenditures for the partnership are forecast at $28 million. Participation in Block AA ONN 2010/2 with the leading Indian National Oil companies is viewed as an important first step in positioning the Company as a partner of choice for future investments in Indian licensing rounds.