The long-awaited completion of Oilex's purchase of Gujarat State Petroleum's majority interest in India's onshore Cambay asset is closer following transaction approvals by the seller and state government.

Oilex said GSPC has approved the sale of a 55% interest in the Cambay production sharing contract to Oilex for US$2.2 million.

The transaction has also been approved by the state government of Gujarat.

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Completion this year depends on finalising a binding sales and purchase agreement, and funding arrangements, in the second quarter.

The government of India must also approve the transaction.

Completion will provide Oilex with a 100% interest in the asset, and the ability to restart field work including a work programme consisting of the drilling of two vertical wells to appraise the Eocene gas accumulation which is confirmed by historical flow tests and up until recently, low-rate cyclic production from two wells from the same reservoir section.

Production was previously suspended from the area.

Oilex’s managing director Joe Salomon said: “The long-awaited resolution provides the company with a pathway to evaluate the significant gas resource potential identified at Cambay. Oilex and GSPC continue to work together to finalise past pending costs related to certain field costs and regulatory spending prior to 2018.

"A pathway has been laid out which re-gains control over the company’s destiny as we now set about restarting operations with a 100% PI and focus on unlocking the significant potential value throughout our Cambay asset.

"We express our thanks to GSPC officials and staff within their exploration, finance and legal departments for their time, attention and support whilst resolving this matter."