GAIL and Oil India MoU for future operations

Gail India Ltd has announced that the Company and OIL India Ltd, on December 27, 2007 has signed a Memorandum of Understanding (M0U) for joint cooperation in various business areas. The agreement was signed by Dr. U D Choubey, CMD, of the Company and Shri M R Pasrija, CMD, OIL. Others present on the occasion included Shri Santosh Kumar, Director (Projects), Shri A K Purwaha, Director (Business Development), Shri B C Tripathi, Director (Marketing) and Shri Arvind Jadhav, Chief Vigilance Officer from the Company, Shri T K Ananth Kumar, Director (Finance) and Shri B N Talukdar, Director (Exploration & Development) from OIL, Shri Manu Srivastava, Director, Ministry of Petroleum & Natural Gas along with other senior officials from both the companies.

Various areas of mutual interests identified in the MoU include Exploration and Production, Natural gas Marketing and Transmission, City Gas Distribution, Coal Bed Methane, Petrochemicals and Technology and Knowledge Sharing. Both the companies will explore opportunities for cooperation in greater details so that respective resources could be pooled on the basis of mutuality and reciprocity.

As part of the agreement, the two companies will jointly participate in the potential blocks, mainly onshore and offshore blocks in the forthcoming NELP VII bidding round. The two Companies will also examine the possibility of joint bidding for overseas exploration blocks and also securing farm-in options in already awarded exploration blocks in India and abroad.

Considering the likely discovery of gas by OIL from its E&P blocks and the Company's vast geographical spread of its existing / planned gas transmission networks and its experience in marketing of gas, the two companies will explore cooperation in transportation and marketing of OIL's share of gas from new discoveries through the Company's existing pipeline network and new infrastructure being created / planned by the Company. Further, the Company and OIL may consider examining joint participation in gas pipeline projects abroad including transnational gas pipeline projects.

The two companies will also examine joint implementation of city gas distribution projects in major cities of Assam and in other states through Joint Venture route along with interested third parties.

Similarly, the Company and OIL will discuss cooperation in CBM opportunities, petrochemicals sector in India and abroad including joint participation in the next CBM bidding round in India.

The Company & OIL are already partners in the Brahamaputra Cracker and Polymer Ltd (BCPL) at Dibrugarh in Assam, where the Company holds 70% equity and OIL 10%. The two companies have considerable technology and knowledge bank developed over the years and they will cooperate with each other in sharing technology and knowledge wherever feasible in mutual interest through training of personnel in areas such as E&P, pipeline and City gas / CNG operations.