“The field is located in one of the most prolific petroleum provinces onshore India close to existing pipeline and industrial infrastructure,” Oilex managing diretor Bruce McCarthy said.

“Oilex will become the operator under the existing PSC and joint operating agreement and will earn its 30% participating interest by undertaking an exploration and development work program of a value equal to 30% of the costs incurred by GSPC and Niko to date.”

The Cambay field was discovered and developed initially by Oil & Natural Gas Corporation (ONGC) in 1957-58 and was subsequently acquired by the GSPC and Niko joint venture in 1995.

Hydrocarbons were found in Oligocene and Eocene sandstones below about 1550 metres. Subsequently 62 wells were drilled to develop and produce gas from one Oligocene reservoir – a small volume of oil from a deeper reservoir below 1730 metres and gas from a shallower Miocene reservoir at about 1420 metres.

In 1991 the field was virtually shutin because of sand and water influx and decline in reservoir pressure after producing about 48% of the Operator’s estimated reserve, according to McCarthy.

“Oilex will conduct a detailed study of existing data to determine the forward work program for in-field exploration and redevelopment of the field,” he said.

“An independent report written in 2002 indicated remaining reserves of up to 39 BCF of gas based on production performance of old wells.

“Most of the wells have suffered well bore damage and sand and water ingression problems.

“There are zones in which oil and gas have been recorded and tested (in some cases) that have not been brought into production.”

Oilex saw this acquisition as the first important step in establishing its presence as an operator in oil and gas exploration and production contracts in India, McCarthy said.

“The objective of this acquisition is to develop a production base in India at the earliest opportunity.”