OREANDA-NEWS. May 05, 2011. Eager to start additional work at its Pre-NELP block, CB-ON/3, in the Cambay basin of Gujarat, operator Essar Oil Limited (EOL) has requested the petroleum ministry to expedite the process of chalking out a new ring fenced PSC. The plea has come following DGH`s approval for granting extension beyond exploration period under clause B-4 of the New Extension Policy for carrying out additional work programme.

While Essar was granted an 18-month extension from February 11, 2010, to August 10, 2011, by the petroleum ministry for carrying out the additional work programme for its pre-NELP onland block, CB-ON/3, the company has not yet commenced operations since the new ring fenced PSC has not yet been signed. Moreover, the firm is also awaiting the grant of Petroleum Exploration License (PEL) by the state government.  8Therefore, the company has requested that the extension be effective from the date of signing the new PSC as is the practice for all exploration blocks signed by petroleum ministry with E&P contractors.

As per the terms and conditions, the contractor would have to sign a separate ring fenced PSC for the exploration area and discovered areas with effect from the extended date. In case of any pre-NELP PSCs, the operator will be the licensee/lessee after the expiry of exploration period and will be liable for all statutory levies and other obligations under the PSC.

Essar has also requested that a draft of the new PSC be shared with it in order to accelerate the process. The private major had received the extension approval for carrying out additional work programme in the retained block area of 119.05 sq km on April 1, 2011. The additional work programme will comprise of 2-D API of 75 LKM, integrating new 2D with existing 2D and 3D seismic data and drilling of a well up to 1200 metre