Vedanta has reported a hydrocarbon discovery in the KG-OSN-2009/3 block in the Krishna-Godavari Basin offshore India following the drilling of the A3-2 exploration well.
The natural resources company Vedanta holds 100% ownership in the offshore block located off the East Coast of the country.
The company, in a statement, said: “Multiple reservoir zones were encountered in the Mesozoic rift formation between the depths of 3351-3944m MDBRT with indications of hydrocarbon during drilling and formation evaluations. Down hole formation tester (MDT) sampled oil and gas from the zones of interest.”
It further said that the zone from 3610-3715m, MDBRT flowed gas to surface during well testing. The company expects further appraisal to evaluate the potential commerciality of the Mesozoic rift discovery.
A3-2 happens to be the first exploration well drilled by the company within the KG-OSN-2009/3 block, which was awarded under the eighth round of India’s New Exploration Licensing Policy (NELP-VIII) to Cairn India, which subsequently merged with Vedanta.
Cairn India had signed a production sharing contract for the KG-OSN-2009/3 block in June 2010. Its parent company Vedanta, in turn, is the Indian subsidiary of London-listed Vedanta Resources.
It is mainly engaged in production of oil and gas, zinc, lead, copper, silver, aluminium, iron ore and commercial power.
Last month, the company was awarded 41 exploration blocks in sedimentary basins across India at a total bid cost of $551m, pursuant to the Indian Open Acreage Licensing Policy (OALP).
The 41 blocks won by the company are made up of 33 onshore blocks and 8 offshore blocks. Depending upon approval from the shareholders of Vedanta Resources, the company plans to enter into 41 revenue sharing contracts (RSCs) with the Indian government to effect the transaction.
Recently, Vedanta Resources agreed to a $1bn takeover offer from Volcan Investments for the share capital not currently owned in it by the latter.
Volcan Investments, which currently owns a stake of around 67% in Vedanta Resources, has offered to buy the remaining shares in the latter for $10.89 per share.