Assam Company set to resume oil & gas hunt

 Beleaguered tea-to-oil company Assam Co (India) might at last bring some good news for investors, with its petroleum business set to take off.

Permission to conduct seismic surveys on its oil block AA-ONN-2005/1 has been granted by the Assam government recently, and geological and geophysical activities are at an early stage, officials said.

This block was awarded under New Exploration Licensing Policy VII round to a consortium of Assam Co, Oil India and ONGC, which is the operator, and the petroleum exploration licence was received in December 2010.

As for AA-ON/7 block, the new production sharing contract (PSC) is set to get executed shortly.

Execution of the PSC has been delayed due to the legal dispute with Canoro Resources of Canada over the Amguri block, which has now been settled.

The block lies partly in Assam and partly in Nagaland. The area under Assam had been relinquished following exploration activity as there was no discovery of either oil or gas. Operations had stopped following government’s termination of PSC and 60% PI (participating interest) of Canoro Resources in Amguri in August of 2010. As an interim arrangement, ONGC was given the custody and responsibility to operate the block, which has now gone to Assam Co.

“Since the matter has been finally resolved and Canoro’s PSC and PI in this block have been terminated by the Indian government in 2011, the new PSC, which has already been approved, will now be executed,” said an official.

Following this, Assam Co has taken steps to resume operations to produce oil and gas.