Gazprom International, acting on behalf of Gazprom, fulfills the functions of an agent for the implementation of the Production Sharing Agreement (PSA) within the framework of the development of block No. 26 on the shelf in the Bay of Bengal. This PSA was signed in October 2000. Following the implementation of 3-D and 2-D seismic exploratory work (530 sq. km and 40 linear km), an estimate of the potential oil-and-gas bearing capacity of the objects was made according to the results. Three exploratory wells were also drilled which did not reveal commercial gas reserves.
India is one of the most surprising places on Earth; it is a country of reckless luxury and hopeless poverty, breathtaking mountains and dense forests, majestic temples and rural hovels. It is the birthplace of great religions and great saints. A country in which life abounds and death is no more than a word. It’s a country in which there is no room for double standards and everyone lives as he or she wishes. India charms with its natural beauty, which combines the sea and mountains, desert and jungle, cold and heat. The entire culture of India, which is based on different religious canons, is nevertheless a monolith, each side of which, like the famous mausoleum of the Taj Mahal, is striking in its beauty.
In terms of population, India has the second-largest population in the world (after China), with a population of more than 1.1 billion people. The country's territory covers an area of 3.2 million sq. km. The huge and diverse Indian subcontinent stretches from north to south from the world's highest mountains — the Himalayas — to the Arabian Sea and the Bay of Bengal in the Indian Ocean and, from the mountains of Afghanistan in the west to the jungles of Burma in the east. Proven natural gas reserves in India number 850 billion cubic metres. Up to 30 billion cubic metres of gas are produced annually in India, the majority of which is consumed in the domestic market.
The Ministry for Oil and Natural Gas in India coordinates the production, refining and distribution of oil and gas production, as well as the export and import of crude oil and natural gas products. All the exploration and production is carried out by two public companies — ONGC (Oil and Gas Corporation Ltd.) and Oil India Ltd. Gas Authority of India Ltd., which controls 95% of the infrastructure in this sector, holds a monopoly in the gas transportation and distribution market.
Gazprom signed a strategic cooperation agreement with the Indian company Gas Authority of India Ltd. (GAIL) and a Memorandum of Understanding with ONGC Videsh. This major document specifically provides for the creation of refining facilities in Russia, India and developing countries; the supply of manufactured petrochemical products to the Pacific and South Asian markets (particularly in India); the construction of main pipelines and underground gas storage systems (UGS); and scientific and technical cooperation in key sectors of the gas industry and also in the field of training and retraining staff. The main areas of cooperation were identified to be the supply of hydrocarbons in India as well as joint operations in the development of deposits, both in India and Russia.
However, Gazprom’s relationship with its Indian partners is not limited to the implementation of one Production Sharing Agreement. So in February 2005, Gazprom held a meeting with representatives of GAIL regarding the company's involvement in India’s New Exploration Licensing Policy (NELP-V). In addition, in accordance with the Memorandum of Understanding signed in New Delhi in October 2000 with "GAIL," Gazprom is considering the possibility of exporting Iranian gas to Pakistan and India. The Russian company is also exploring the possibility of collaborating with other major Indian public and private companies in the exploration, production and refining of hydrocarbon raw materials, such as ONGC (Oil and Gas Corporation Ltd.) in terms of joint activities under the Sakhalin-1 project and Reliance Industries for joint ventures in the gas market in India.
Block 26 is located within the continental shelf of India and is part of the Bengal Oil-and-Gas basin. The block’s area covers 10,425 sq. km., and its water depth ranges from 40 to 150 m; the depth of prospective oil and gas horizons are situated up to 6,500 m from the surface. The total resources of the block are 248 to 367 million tons of equivalent fuel, including 319 billion cubic metres of natural gas, 37.6 million tons of condensate and 18.8 million tonnes of oil.
In 2006, using a semisubmersible drilling rig, the first exploratory well was drilled in the block. The well was drilled to a depth of 2,445 m. Five promising areas were isolated as a result of the interpretation of the 3-D materials, and the drilling of a second well was recommended. Because of abnormally high reservoir pressure, the second well was not drilled to the projected depth of 4,415 m; however it did reveal the basic projected horizons.
In September 2007, "GAIL" withdrew from the project and Gazprom continued exploration work on the block independently. In 2008-2009, a 2-D seismic survey was carried out. In May 2010, Gazprom International and the Japanese Drilling Company Ltd. drilled a third exploratory well in block No. 26 to a depth of 3,200 metres, which as with both previous ones, did not show any evidence of commercial reserves of hydrocarbons and was liquidated.