Oilex Issues Default Notice to Indian Partner
Australia-listed Oilex has informed its Indian partner Gujarat State Petroleum Corporation (GSPC) it will take over its interest in the Cambay production sharing contract (PSC) if the Indian company fails to clear dues within 60 days.
Oilex May 29 said it has issued an event of default notice to GSPC regarding the Cambay PSC to the tune of $3.05mn. The notice, issued pursuant to the joint operating agreement, is a consequence of GSPC’s ongoing failure to pay its participating interest share of the expenses of the Cambay PSC, Oilex said.
Oilex said GSPC can remedy its default by settling the outstanding amounts. “If this does not occur within 60 days, the company may issue a notice whereby GSPC shall be immediately deemed to have transferred all its participating interest in the PSC to the non-defaulting parties, ie. Oilex,” it said, adding increase in its participating interest in Cambay from 45% to 100% would greatly assist in strategic farm-in discussions with third parties.
The company has received several informal expressions of interest from parties to participate in the ongoing work programme and looks forward to updating the market when appropriate, Oilex said.
GSPC is struggling to pay off its debt and recently sold 28.4% stake in Gujarat Gas, its city gas distribution business, to its subsidiary Gujarat State Petronet.
Cambay field is located in the western Indian state of Gujarat. In July 2005, Oilex entered into an agreement with the Cambay field joint venture, comprising GSPC and Niko Resources to acquire a 30% participating interest in the PSC covering the Cambay field. Oilex acquired an additional 15% equity interest from Niko and now holds a 45% participating interest in the Cambay PSC. In April, Oilex said Indian oil and gas ministry has extended the Cambay PSC.