Canada-based Bengal Energy has been awarded a contract by India for a hydrocarbon drilling and exploration block in the Cauvery basin, which spans Karnataka and Tamil Nadu.
Under the pact signed with Indian authorities, the company headed by Chayan Chakrabarty, has been entrusted with the task of developing a block in the basin. Covering 250,000 sq km, the Cauvery basin currently has 28 active oil and gas fields.
Listed on the Toronto Stock Exchange, Bengal Energy was formed after its predecessor, a privately-held oil and gas exploration company called Bengal Energy Inc, was purchased by Avery Resources in February 2008.
Avery Resources subsequently changed its own name to Bengal Energy Ltd in July 2008 to reflect its international oil and gas focus in India and Australia.
The block acquired by the Canadian company is spread over 1,362 sq km. It is located from 7-16 km offshore, with approximately two-thirds in water depths of less than 100 metres.
Bengal Energy won the contract after bidding under India's new exploration policy. Under the production-sharing contract, the company will hold a 100-percent interest in the block, the company said in a statement.
The company said it will prepare 310 kilometres of 2D seismic data and 81 square kilometres of 3D seismic data during the first four years of the seven-year exploration phase of the block.
It will enjoy a seven-year tax holiday from the start of commercial production.
Headed by Chakrabarty, the company is also part of a consortium comprising GAIL India and the Gujarat State Petroleum CorP to undertake exploration in the Cauvery basin.
The Tamil Nadu government has signed a four-year agreement with the consortium in which GAIL has a 40 percent stake, Bengal Energy and the Gujarat State Petroleum Corp have 30 percent each.