Press Releases
[New Delhi, 28th June, 2006]

GAIL consortium inks E & P Sharing Agreement for Oman Block

New Delhi, June 28, 2006. GAIL (India) Limited along with its consortium partners has signed the Exploration and Production Sharing Agreement (EPSA) with The Government of the Sultanate of Oman for Block 56 in Muscat today in the presence of His Excellency Dr. Mohammed bin Hamed Al-Rumhy, Minister of Oil & Gas, Sultanate of Oman, other Government dignitaries and Senior officials of the Ministry of Oil & Gas.

The consortium consisting of GAIL, Oilex Australia, Videocon, HPCL and BPCL has been awarded Block No. 56 in Oman for exploration and production of hydrocarbons. GAIL, Oilex and Videocon have 25% share participating interest each in the consortium. Oilex Australia are the operators. The Block 56 is an onshore block located in the South Oman Salt Basin area located in the eastern flank covers an area of 5,809 square kilometers. The Block, adjacent to existing producing fields, was the consortium’s first choice block and the highest rated of the blocks on offer in the bid round that closed on 1st January 2006. Sultanate of Oman had offered five blocks (Block 54,55,56,57 and Block 58) in the fringes of the south Oman salt Basin under competitive bidding round. The blocks 54, 55 and 56 were in the eastern flank where as block 57 and 58 are in the western flank.

As per the commitment by consortium under the EPSA, the work will commence with reprocessing of existing seismic data followed by acquisition of 2D and 3D seismic in last quarter of 2006 depending on availability of seismic contractors. Drilling activity in the block is expected to start some time in the first half of 2007.

The consortium has assessed the potential of the Block based on the possibility of salt related structures which are similar to the producing Blocks in the west flank of the basin. 20 structural leads coupled with the possibility of extension of the proven Ara salt play across Block 56, justified a comprehensive work program set out in the Consortium’s winning bid application.

With the award of this block, GAIL’s total exploration acreage has increased to 91350 sq. km. GAIL now holds a participating interest in 16 exploration blocks. Of these, 7 are on-land blocks and 9 are offshore blocks. The various consortium partners of the company in the 16 blocks are ONGC, GSPC, Gazprom, OIL, IOC, Hardy Exploration & Production, Enpro Finance Private Ltd., ENI India Limited, Jubiliant, GGR Canada, Daewoo, OVL, Korea Gas, Oilex, Videocon, BPCL and HPCL. GAIL’s participating interests in these blocks varies between 10 to 80 per cent.

GAIL has been looking to widen its E&P horizons to include strategic regions beyond Indian shores. GAIL’s earlier international foray in E&P in Myanmar has been quite successful, with large gas discoveries in the A1 & A3 Blocks.

GAIL plans to aggressively pursue various exploration avenues and acquire E&P acreages in the international arena in consortium with international E&P players. GAIL has also been pursuing several “farm-in” opportunities worldwide to gain a strategic position in international E&P market.