GAIL ventures into Marketing Crude Oil
GAIL’s E & P foray yields revenue

New Delhi, September 8, 2005 GAIL (India) Limited has forayed into marketing of crude oil with the flagging off of the first tanker of crude oil produced by GAIL from the block CB-ONN-2000/1 in Cambay basin as a consortium partner with 50 percent participating interest with Gujarat State Petroleum Corporation Limited (GSPCL). With this development, GAIL’s foray into Exploration and Production activities has started yielding revenues. Initially, it is expected to be in the order of Rs. 18 crores per annum, which would increase by 4 folds in subsequent years.

GAIL has been able to achieve the production of crude oil within a short time, thanks to the installation of Early Production System (EPS) under Initial Development Plan for early monetization of the reserves. This initiative has led to production of crude oil in a short time. Initial production from the field is around 350 barrels per day which is expected to increase up to 1500 barrels per day in the future. Oil is being dispatched to Koyali refinery of IOC via ONGC Central Tank Farm at Navagam (Gujarat), through tankers and pipelines.

Currently, GAIL is involved in exploration activities over an acreage of 67,118 sq km, and plans to invest approximately Rs 600 crore in E&P activities over the next three years.

GAIL holds a participating interest in 13 exploration blocks, comprising two in NELP-I, five in NELP-II, two in NELP-IV apart from two ‘farm-in’ blocks. GAIL has managed to extend the partnership in these ventures to various companies such as ONGCL, GSPCL, Gazprom, OIL, IOCL, Hardy Exploration & Production, Enpro Finance Private Ltd., Daewoo, OVL and Korea Gas Corporation. Similarly, GAIL’s participating interest in these blocks varies between 10 to 80 per cent and in Basins such as Mahandai, Bengal, Gujarat –Saurashtra, Mumbai, Cambay, Assam-Akaran and Cauvery.

With the proposed move to acquire stake in the Yadavaran fields in Iran, GAIL’s kitty would increase to 16-18 blocks from the present 13 blocks in the domestic and foreign markets. in the medium term.

Further, GAIL has also got stake in the A-1 block in Myanmar where it is likely to get a stake in the A-3 block in Myanmar also. The strategy is to acquire E&P acreage in the international arena in consortium with international E&P players. Recently GAIL has been qualified as non operator to participate the ongoing 2nd round of bidding in Libya. Also GAIL has been pursuing several “farm in” opportunities world wide to gain strategic foot hold in international E&P market.