Business
Bengal Energy Signs Production Sharing Contract in India
Bengal Energy Signs Production Sharing Contract in India
About this update from Bengal Energy Ltd.
[{"type":"text","content":"\n\n\n\n Jun. 30, 2010 (Canada NewsWire Group) -- Bengal Energy Ltd. (TSX: BNG) ("Bengal" or the "Company") is pleased to announce that its wholly owned subsidiary, Bengal Energy International Inc. ("BEII"), received the official award of India Block CY-OSN-2009/1 (the "Block") today at a formal signing ceremony with the Government of India ("GOI"). The Block had been provisionally awarded during the New Exploration Licensing Policy ("NELP") VIII bid round in the fall of 2009. The Production Sharing Contract ("PSC") between BEII and the GOI sets out the terms and conditions for the exploration and development of the Block. It is situated in the Cauvery Basin in SE India and encompasses 1,362 square kilometers (approximately 340,000 acres). BEII holds a 100% interest in the Block and is the operator. The Block is located from seven to 16 kilometers offshore with approximately two-thirds in water depths of less than 100 meters.\nThe Company has already identified a large seismically-defined geological structure within the Block from a detailed technical review of existing 2D seismic data. The areal extent of the structure is approximately 18,750 acres. The Company plans to acquire and evaluate 3D seismic data over the structure to better define the opportunity and develop a follow-up drilling program. Oil companies within 50 kilometers of the Block have committed to spend in excess of $200 million on exploration over the next four years. The Cauvery Basin is an active producing basin covering an area of around 250,000 square kilometers and currently has 28 producing oil and gas fields.\nThe winning bid requires BEII to acquire 310 kilometers of 2D seismic data and 81 square kilometers of 3D seismic data during the first four years of the seven-year exploration phase of the Block. The committed work program capital expenditure is estimated at US$2 million (approximately $6/acre). Drilling will be required to hold the Block after the first four years of exploration is complete. There is a seven-year tax holiday from the start of commercial production.\nWith 16% of the global population, India is the fourth largest consumer of primary energy and the fourth largest economy in the world. With its per-capita energy usage at only 10% of the average consumption of the w...