The Company along with Bharat Petroleum Corporation Ltd (BPCL) identified an opportunity for farming into a North Sea Block in the United Kingdom where the existing holders were M/s Encore Oil Plc and M/s Norwest Energy. The Farm-Out agreement was signed by the Companies on 13th March ’07. The participating interest of all partners is 25% each.

In 1984, AMOCO had drilled and located gas in the Block which was not commercially viable at that time for various reasons including low gas prices prevailing then. The original well proved the presence of a gas column in the structure and subsequent work by Norwest and its partners indicate gas volumes significantly larger than the minimum economic field size. A number of producing fields in the immediate vicinity provide a range of alternatives for gas production/delivery to onshore gas plants. Hence, in the current scenario the Block has become quite viable and the company currently estimates the Block to contain gas reserves of about 40 BCF. The consortium for this block has completed drilling of the committed well. This well, named as ‘Cobra’ was drilled in Q1 & Q2 2008. The estimated recoverable gas reserves of around 40 bcf were confirmed.

However, the well flow rates of 1 MMscf/day were lower than anticipated rates of 5 MMscf/day due to tight reservoir conditions. The Operator has engaged consultants to carry out studies to determine the possibility of hydro-fracturing operations in the reservoir and also its impact on well flow rates. Case histories in the adjoining fields suggest substantial productivity increase can be achieved by drilling horizontal well coupled with hydro-fracturing. The joint venture has commenced discussions with BP for negotiating an acceptable tariff fee for infrastructure use also. It is proposed to commence FDP preparation once a tariff has been agreed to.