Thursday, January 7, 2010

Assam Company - Updates.

Q: How much of your business comes from tea, how much comes from oil and gas and I believe some of your facilities are shut because of some injecting issues and how much comes from road transportation? Could you just give us a percentage breakup of what is going on right now?

A: At this moment, last year, predominantly our overall percentage of profit came in from tea. Oil and gas was the smaller version. The reason was in oil and gas we had come out with big pool and in the pool we have found that the gas which is there is a retrogress gas. So we are putting up a gas compression unit where we will convert the gas back to the oil.

On the balance lean gas, we will then put up a power plant to get the value added. So at this moment, the revenue from oil is down because we have stepped it down. Otherwise we will be flaring in rich gas which we can use as oil and an oil condensate.

Q: If I can get some details on the FCCBs that you have bought. We understand that you have bought USD 2.2 million worth of FCCBs. How much is left outstanding, when does it mature, what is the conversion price?
A: Totally last year, we have bought nearer to 13 million of FCCBs. The company had issued 48 million of FCCBs. Out of which, 5 million got converted and 13 million was bought back, leaving nearer to 32 million which is outstanding in the market. The conversion price of these FCCBs is at Rs 28.75.
Q: The conversion date would be?
A: It is November 2011. We still have close to another two years.
Q: You also have on your website an SPV called Gujarat Hydrocarbon & Power SEZ Ltd. Could you tell us what is the status with that and have you bid for any oil and gas wells or have you gotten any concessions in any of the NELPs, or are you doing oil in a serious way at the moment?
A: The pre-NELP we have got two oil concessions, both were in Assam. 40% of the proven reserve for the government of India is in Assam Arakan basin. We have two blocks there, out of which in one block we have started the production. That is a block where we have further done some studies and we have found that the oil that we get is of richer quality. It is an oil condensate, and we get about USD 4-5 higher than the oil basket rate.
Hence what happens is when it is taken out at a high pressure, it converts into gas. Gas does not have the same market as oil. So we are putting up a gas compression unit which in another three-four months should be online. By doing that, we will be able to step up our oil production.
The gas that we will come out with, we will then set up a power plant. The company is in discussion at the moment to set up a 300 megawatt (MW) gas based power plant which would be done in phases. The first phase is about 80 MW which is on its way.
We have also got, in the NELP-VIII round, a block in Assam, where we are a partner with ONGC and Oil India. All the three have jointly bid together.
Regarding the Gujarat SEZ, we have taken this on the Vibrant Gujarat project, which would be the first logistic park which will be set up for hydrocarbon and its chemicals and petrochemicals. We have acquired the land, we have got the permission. We are now awaiting the notification before we start doing the land-breaking ceremony and going ahead with the project.


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