Assam Company bubbles with oil find OUR SPECIAL CORRESPONDENT
http://www.telegraphindia.com/1051101/asp/business/story_5422555.asp
Calcutta, Oct. 31: Assam Company has struck oil at Amguri, 35 km east of Jorhat. The company is exploring the area with Canoro Resources a Canadian company with expertise in oil and gas business worldwide.
Well number 5 in Amguri oil field can produce 588 barrels of oil per day, said Aditya K. Jajodia, managing director and CEO of the company. At present, the company is doing exploration work in two other wells 6 and 1 in the Amguri field.
Assam Company has 40 per cent working interest in the Amguri oil field, while the remaining 60 per cent is enjoyed by the Canadian company.
Assam Company is also engaged in the exploration of another block, AAON 7, in association with Canoro Resources. In this block, Assam Company enjoys 35 per cent working interest and the rest is with Canoro.
Assam Company has entered into a service contract for development and operation of three discovered fields in partnership with ONGC. These three fields are Laxmijan, Barsilla and Bihubar. In these three fields ACL will have a 35 to 38 per cent stake.
"Earlier, commercially proven reserves were found at the Amguri development blocks. The blocks encompass an area of 52.75 square kilometres with the estimated oil reserve of 50 million barrels and associated free gas reserve."
The company expects to come into real oil production within the next three to four months. "We are expecting 160 million barrels of oil per day from all the five oil blocks. The total investment is to the tune of $100 million. ACL has already invested $9 million," said Abhay Chawdhry, chief financial officer of the company.
The Assam basin has a reserve of 23.9 billion barrels, which 45 per cent of Indias on-shore oil reserve.
"The oil business will have an impact on the balance sheet from the third quarter of 2006," said Chawdhry.
Assam Company has also bid for new oil blocks under NELP VI programme.
It is also engaged in the business of tea. It has 16 tea estates within its fold with a total production of 15.6 million kg. "We are weighing the options to use the low-lying lands in our tea estates which are not under cultivation for producing herbal and medicinal plants," he said.
Demerger move
Assam Company has appointed PricewaterhouseCoopers and Khaitan & Company for carrying out the feasibility study for demerging the oil and tea businesses.
"They are expected to submit the report by the end of December. We will then take a decision whether to demerge the two businesses," Chawdhry said.
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