Mumbai: Australia-based Oilex Ltd, one of the few international exploration and production companies in India, has sought a 10-year extension of production sharing contracts for two of its key fields in Gujarat—Cambay and Bhandut. A production sharing contract (PSC) is an agreement between the contractor or the company and the government whereby the company bears the exploration, production and field development costs and risks in return for a stipulated share of profit from production. 

“Obtaining a ten-year extension of the Cambay production sharing contract incorporating a proposed field development program. The application was lodged in September 2017 quarter and the company is working closely with the Directorate General of Hydrocarbons to secure the extension," Oilex said in its September quarter report to shareholders on the Australian stock exchange. 

Gujarat’s Cambay basin, where the Cambay field is located, is rich in petroleum resources. 

Oilex added that a formal response on the application is anticipated in mid-2018 although the company believes that it may come sooner. The company has a significant multi-trillion cubic feet of gas resource at Cambay. 

Gujarat State Petroleum Corporation (GSPC), the exploration and production arm of the GSPC Group, holds a 55% stake in the field while Oilex holds 45%. Till last June, there were fears that the Cambay field may face closure as the joint venture partners sparred over investments in the field. 

 However, during the quarter, Oilex received $78,182 (Rs50,72,862) in outstanding cash calls from GSPC, its partner in the Cambay basin. 

As of 30 September, gross unpaid cash calls remaining outstanding from GSPC totalled about $5.5 million, Oilex said. 

“The company continues to maintain a constructive dialogue with its joint venture partner to resolve the payment of these remaining outstanding cash call balances. Oilex as operator has continued to bear the ongoing costs of the joint venture," Oilex said in the quarterly earnings statement. 

In the Bhandut field, Oilex holds 40% equity with GSPC holding the rest. 

During the quarter Oilex received $34,708 from GSPC against outstanding cash calls for the Bhandut field. 

“At the end of the quarter, total unpaid cash calls by GSPC had been reduced to $50,647," added Oilex. 

The company, however, said it is in discussion with several parties, seeking expressions of interest in a possible sale of its participating interest in the Bhandut PSC.