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Eni Said to Delay India Oil Block Exploration on Rig Shortage, BP Spill
Eni SpA, Italy’s largest oil and gas company, may delay exploration of an offshore field in India by at least a year, said two people with knowledge of the plans.
Eni, which owns the Andaman block with Oil & Natural Gas Corp. and Gail India Ltd., is reconsidering the risks of deepwater exploration following the BP Plc accident in the Gulf of Mexico, one of the people said. Difficulties in sourcing a rig may also push back drilling until at least the second half of next year, the people said, asking not to be identified because the matter is confidential.
Filippo Cotalini, a spokesman for Eni in Rome, didn’t comment after acknowledging an e-mail from Bloomberg yesterday. Narayani Mahil, a spokeswoman for ONGC in New Delhi, was unavailable to comment, an assistant at her office said today.
ONGC Chairman R.S. Sharma said on June 24 that explorers worldwide may struggle to get approval for offshore developments following the BP spill. Norway removed four offshore blocks from a licensing auction on June 23 while it studies the causes of the Gulf disaster.
India’s largest oil and gas discoveries have been off the coast, including Reliance Industries Ltd.’s KG-D6 natural gas field and ONGC’s Mumbai High. Of the acreage with the most potential for future exploration, 41 percent lies offshore, according to the Directorate General of Hydrocarbons website.
Eni was named operator of the Andaman block in 2005 and committed to commence drilling within four years, which it later extended to late 2010, according to its website. The 13,000 square kilometers (5,019 square miles) of acreage near the Andaman and Nicobar islands in the Bay of Bengal includes waters as deep as 2,600 meters, according to India’s upstream regulator.
Eni is awaiting a rig that is still in use at a site in East Timor, said one of the people familiar with the matter.
Eni is also operator of a block in northwestern Rajasthan state and holds a 47.16 percent stake in Hindustan Oil Exploration Co., which started producing gas off southern Tamil Nadu state in October, according to the company’s website.
To contact the reporter on this story: Natalie Obiko Pearson in Mumbai at npearson7@bloomberg.net.
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