Date:04/06/2006 URL: http://www.thehindubusinessline.com/2006/06/04/stories/2006060403200300.htm

Back ONGC may pick 30% stake in Assam-Arakan project

Pratim Ranjan Bose

Kolkata , June 3

ONGC may pick up 30 per cent stake in AA-ON/7 block - from where it had once walked out - from the existing operator Canoro Resources Ltd.

A pre-NELP block, AA-ON/7 is located in the Assam-Arakan basin in North-Eastern India. Canoro recently identified a sizable recoverable reserve of 172 million barrels of oil equivalent (mmboe) in the block.

According to a prospective estimate prepared by Canoro's independent evaluator Sproule International Ltd, the block has an in-place reserve of 313 million barrels (mmbbls) of oil and one trillion clubic ft (tcf) of natural gas.

Earlier, ONGC had failed to identify economically viable reserve in the block, which was later awarded to a consortium of Canoro Resources (65 per cent) and Assam Company (35 per cent) with a rider that ONGC may elect to back-in with a 30 per cent stake in case of a commercial discovery.

ONGC sources admitted that the company was considering using the "back-in" option.