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Wednesday, November 11, 2009

Adani Welspun may divest oil & gas equity

After power, oil & gas exploration is the next big thing on the radar of the diversified Adani Group. The group’s joint venture with Goenka-promoted Welspun, Adani Welspun Exploration (AWEL), is exploring possibilities to divest equity from its oil and gas assets while assessing opportunities to pick up stake in new resources.

A relatively small entity, AWEL’s portfolio includes eight assets including five in India, two in Thailand and one in
Egypt. Currently, Adani Group has undertaken a major drive to consolidate its holdings in the group companies. Recently, the promoters’ holding in Mundra Port and SEZ was merged into flagship Adani Enterprise.

Talking to a top Adani Group official said: “We are
consolidating our position in the energy sector by divesting equity in the existing assets to spread exploration risk. We are also exploring opportunities to pick up stake in new fields to balance our portfolio.” He added that the JV is looking for participating in India and international markets, but did not divulge further details.

It may be mentioned here that recently, Pranav Adani of Adani Group accompanied the state government and industry delegation to Russia to attend International Energy Week and met representatives of majors like Gasprom Systema and STG among others. According to market sources, AWEL is in negotiations with various exploration majors at different levels in central Asia, Russia and Indonesia where Adani Enterprise also enjoys interests in coal mining.

AWEL has majority stake in its Cambay Basin block (90%), Assam block (90%), Mumbai offshore block (100%) and two Thai blocks (100%). The JV also has significant participating interests in a GSPC-led consortium in offshore block in Egypt and in an ONGC-led consortium for two Gulf of Kutch offshore blocks.

Meanwhile, the company announced commencement of oil and gas exploration activities at its Mumbai offshore block, MB-OSN-2005/2, awarded under the NELP-VII bid-round. “Contract for 3 dimensional seismic survey, has been awarded to Western Geco, a Schlumberger Group Company, within one year of signing PSC for the entire block covering 1,191 sq km, the industry average for awarding such contract is around 18-20 months. The survey is expected to commence by December 2009,” read the official statement made by AWEL. It claimed that the Block MB-OSN-2005/2 is surrounded by producing assets and there have been recent discoveries in close vicinity.

In its southern Cambay basin onshore block, AWEL has already completed first round of 2D and 3D seismic data acquisition, processing and interpretation (API), and is planning for exploratory drilling by next quarter, early 2010. Among others, in AWEL’s on-land Assam block, 2D seismic API has been completed and 3D seismic survey covering the entire block will start soon. Two large onshore blocks in Thailand (L-39/48 and L-22/50) are also being currently covered by 2D seismic survey.

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