ESSAR Exploration & Production Ltd (EEPL), an Essar group company, has become the first Indian oil company to enter Australia by winning two offshore petroleum exploration blocks in the northern basins of the country.

Confirming the development, MD & CEO of Essar Oil Naresh Nayyar said, “Acquiring the blocks has a strategic importance to the company. We are now well placed as far as our overseas developments are concerned. We are in geographies that are stable and this will work to our advantage.”

Essar had participated in the bidding round along with several global oil majors including Chevron, Exxon Mobil among others, a company official involved with the bidding process said. It would be difficult to put a value of the reserves since the oil blocks are exploratory in nature, but they are within a region that has had several finds in the recent past, the official said. Essar will have to pay a 40% tax on its profits from the blocks as per the norms of the Australian government but will have the freedom to bring in the oil and gas to India.

“EEPL has been awarded two exploration permits NT/P77 and NT/P78 in shallow offshore in northern territory of Australia. The blocks fall in a proven petroliferous basin close. These blocks will help the Essar group consolidate its presence in Southeast Asia & Australasia and integrate its operations with other blocks in the sector,” a company official said. EEPL has exploration & production (E&P) blocks in India, Madagascar, Nigeria, Indonesia and Vietnam.

Essar was the sole bidder for the block NT/P77 which is located in the Bonaparte Basin off the northern territory. The company offered a guaranteed work programme of 950 square km of new 3D seismic surveying, geotechnical studies and two wells to an estimated value of $59 million. The secondary work programme consists of 600 km of new 2D seismic surveying, geotechnical studies and one well to an estimated value of $31 million, he said.

EEPL has recently won one block in Mumbai offshore under the seventh round of New Exploration Licensing Policy (Nelp VII). It also operates exploration blocks in India in Cambay and in Assam basins.

Essar’s oil and gas portfolio include E&P block in Mehsana (Gujarat) that has currently started commercial production. It has also been awarded a coal bed methane (CBM) block at Raniganj in West Bengal, and two more E&P blocks in Assam.