Economic Viability Of Project

The economic viability of the project can be established in three phases;

• The Demonstration phase
• The Pilot scale phase or a semi commercial phase
• The final commercial phase.

The Demonstration Phase:

In the demonstration phase, the focus will be most on the establishment of the technology, its applicability to various geological/reservoir domains and a general collection of operational data and the actual parameters of working.

While the demonstration phase will be a sort of a show case for the well owners/ operators to view the technology's efficacy, it will also enable us to set benchmarks on the various aspects of integration and operational methodology. Notwithstanding the investment of about Rs.1.25 crores attributed to the sustenance of this phase, a return on this investment is planned as well. The considerations are thus;

• That the tool(s) and ultrasound generators will be available for demonstration of the EOR process on free but returnable basis from the parent company till the validation is made. The time span envisaged is about 4 weeks. There will be no cost attributable to the well owner.
• That the paraphernalia required integrating the tool(s), power equipment, winches, cables etc shall be outsourced on a cost per day basis.
• That the enhanced oil production shall be shared between the well owners/ operating company and our venture.
• The parent company shall be paid for its onsite engineering and operational expertise (ie. their engineer(s) operating the down hole tool(s), ultrasound power equipment, data logging analysis etc). Such onetime payment shall be restricted to the Demonstration phase only.

The Pilot Scale Phase Or A Semi Commercial Phase

At the outset, during the Demonstration Phase, a contract shall be drawn with the well owner for the Ultrasound assisted EOR for 400 wells, of course subject to the success of the demonstration of the technology on at least 5-15 wells

In this phase there will be distinct shift of operational methodology and structural amendment to the business. The considerations are thus;

• An option for the parent Swiss company to participate in the equity shall be created. The rationale being that a sustained technological support and eventual up gradation of the technology will be available. Whether the company will take up the stake by supplying the tools to the operating company here or attribute a financial value, will be a matter of discussion after the completion of successful demonstration phase.
• An option for the Well owner to participate in the equity shall be created to ensure non competition from currently competing technologies or the ones arising in future. This move will also ensure a continued support to the venture in all the operational aspects as well.
• All other aspects of the proposed partnerships ie. Financier, vendors etc shall be maintained as planned.

The Final Commercial Phase.

In the final commercial phase, there will be distinct reorganization of business structure on the basis of independent partnerships with well owners/operators. The now existing company/venture shall promote partnership ventures with various well owners on Production Sharing basis as mentioned earlier. Such partnerships shall maintain the integrity of the technology on a wider scale.