Date:31/03/2006 URL: http://www.thehindubusinessline.com/2006/03/31/stories/2006033103960200.htm

Back Myanmar okays GAIL plan to buy stake in A-3 Block

Our Bureau

New Delhi , March 30

The Government of Myanmar has approved a plan by GAIL India (Ltd) to own a 10 per cent stake in an offshore gas and oil project called the A-3 Block, the company said in a statement on Thursday.

GAIL will buy the stake from South Korea's Daewoo International Corporation.

The A-3 Block was awarded to Daewoo International in February 2004. GAIL had, thereafter, signed an assignment on October 3, 2005, for equity participation in the block. As per the Production Sharing Contract, the assignment agreement required formal ratification of the Government of Myanmar, the statement said.

Drilling of the first exploratory well in the block had been completed recently, resulting in gas discovery. Appraisal of the block and further exploratory drilling are likely to commence by the year-end. The A-3 Block, measuring 6,780 square km, is situated to the A-1 Block, where commercial gas discoveries have been made.

GAIL is a consortium partner in the A-1 Block and is the preferred buyer for the gas produced from the A-1 Block, it said.

"In the event commercial reserves are further established in Block A-3, the overall combined reserves base of A-1 and A-3 shall enhance the robustness of gas export project to India as well as optimisation of capital investment required in upstream and downstream facilities," the statement said.