Essar Oil (EOL) is venturing into oil exploration and production business overseas. The company has signed a production sharing contract with the government of Myanmar to prospect for oil and gas in two blocks - one offshore and one onshore. The contracts were signed by Essar Oil and the Myanmar oil and gas enterprise.

EOL had bid for the two contiguous offshore blocks (Block A2) and an adjoining block on land (Block L) in January. The blocks are located between proven gas blocks and aligned along the regional corridor of gas discoveries south of Bangladesh, which includes the highly productive Sangu Gas field in the country. The Rakhine coast lies along the east of these blocks.

EOL plans to conduct a feasibility study, which will cover collection of geological, seismic and well drilling data, reprocessing and reinterpretation of 1,000 line km of old 2D seismic and geological data and geological mapping, modelling and identification of prospects. The feasibility report is expected in a year.

The upstream foray dovetails with Essar's plan to set up a 10.5 mmtpa refinery at Vadinar in Gujarat. The company has also commissioned over 500 petroleum retail outlets across the country.