UK’s Hardy in talks to buy out entire RIL stake in GS-1 block
RIL wants to exit Gujarat-Saurashtra offshore basin block (GS-01) as it feels that reserves discovered so far are not economically significant. "Hardy continued discussions with the operator to acquire their 90 <g data-gr-id="35">per cent</g> interest and operatorship. General commercial terms have been agreed and a draft <g data-gr-id="36">farmout</g> agreement is under review by both parties," the UK firm said announcing operational and financial review of 2014-15 fiscal.
It said the agreement for <g data-gr-id="46">transfer</g> of interest and operatorship will be subject to <g data-gr-id="47">approval</g> of the Government. Hardy currently owns 10 <g data-gr-id="32">per cent</g> interest in the block where a gas discovery, named Dhirubhai-33, was made in 2007. The well that discovered the reserves flowed 18.6 million standard cubic feet per day of gas and 415 barrels of condensate during tests.
The GS-01 licence is located in the Gujarat-Saurashtra offshore basin off the west coast of India, northwest of the prolific Bombay High oil field, with water depths varying between 80 meters and 150 meters. The retained discovery area covers 600 square kilometers. Hardy said a field development plan (FDP) for Dhirubhai 33 natural gas discovery was submitted to the government for review and approval in 2012.
A discovery was declared commercially viable in 2011.
The development plan provides for several dry tree wells, an unmanned platform, multiphase pipeline to shore and onshore processing and export facilities, it said.
"A draft <g data-gr-id="31">farmout</g> agreement is under review by both parties and the final outcome of these negotiations will be known in the near term," Hardy said.
It said <g data-gr-id="39">timely</g> resolution of liquidated damages for <g data-gr-id="40">unfinished</g> minimum work programme (or minimum work <g data-gr-id="33">committted</g>) could accelerate <g data-gr-id="41">conclusion</g> of the acquisition process. "Following this, a priority will be to secure government approval of the FDP and initiate planning for development," Hardy said.
20% hike in Cairn’s Ravva gas price
The government is likely to raise the price of natural gas produced from Cairn India's eastern offshore Ravva field by 20 <g data-gr-id="74">per cent</g> to $4.2 with effect from June 2010. The Ravva field is divided into two - Contract Area-1 which produces about 8 million standard cubic feet per day of gas (<g data-gr-id="75">mmscfd</g>) and Ravva Satellite that generates around 20 <g data-gr-id="76">mmscfd</g>. Cairn gets $4.3 per million British thermal unit (mmBtu) for gas from Ravva Satellite field while it gets $3.5 for Contract Area-1. "Even though Cairn gets $3.5 for Contract Area-1, GAIL India sells the same gas to consumers at $4.2 per mmBtu. The difference is credited to a gas pool account," a government official said. He said when consumers are charged $4.2, the producer too should get the same price. "There certainly is a case for revision in price as is being demanded by Cairn," he added. Once approved by competent authorities, Cairn will get the $4.2 price from June 2010, the date from which GAIL has been selling Ravva Contract Area-1 gas at rates similar to the one fixed for state-owned ONGC.