Oilex Bullish about Indian Project: CEO

Australian producer Oilex has reinvested in its key asset, its Cambay project in India which it operates with a 45% stake, CEO Brad Lingo said in a statement November 29. He said Oilex "remains committed to unlocking the multi-trillion cubic feet in-place tight gas potential in the tight EP-IV silt stones." 

Energy demand in India continues to underpin a strong investment case for the joint-venture partners at Cambay. The Indian government strongly supports the oil and gas sector with new initiatives to promote exploration and development and particularly to reduce the reliance on imported energy products. The improved operating environment in India is further strengthened by the recent strong rally in Asian LNG prices, Lingo said. Further tailwinds come from the plans to clean up the air pollution by heavy taxes on petcoke and furnace oil.

In August, Schlumberger, Baker Hughes GE and ODSI completed a technical evaluation of the optimal well and stimulation design required to achieve potential commercial flow rates in the EP-IV reservoir. Notably the results from their analysis has confirmed the potential for substantially increased flow rates with the application of the appropriate stimulation technology, he said.

In September, a field development plan covering both the high potential EP-IV reservoir and the modest potential OS-II reservoir was submitted to the government with other documents supporting its application for a ten-year extension to the production-sharing contract beyond 2019. A decision on the application for the extension is expected by mid-2018.

Then this month Oilex released its work programme target for 2018 comprising up to nine workovers, and three vertical wells with the possible start of a horizontal well. If EP-IV proves successful, it would likely lead into a multi-well horizontal development program at Cambay, he said. 

However there are still outstanding receivables from its Indian joint-venture partner, state-owned  Gujarat State Petroleum Corp; and Lingo said resolution of these "legacy cash calls will continue to be a priority in 2018. At the moment, outstanding cash calls total $5.6mn."