EXTRANCHECK: POST-SHIPMENT VERIFICATION: SCHLUMBERGER ASIA

UNCLAS NEW DELHI 003321 SIPDIS SIPDIS USDOC FOR 532/OEA/M. NICKSON-D/KGAINES/JAY HATFIELD USDOC FOR 3131/USFCS/OIO/ANESA/KREISSL USDOC FOR 4530/MAC/ANESA/OSA ICE HQ FOR STRATEGIC INVESTIGATIONS STATE FOR EB/ESP E.O. 12958: N/A TAGS: ETTC ETRD BEXP IN SUBJECT: EXTRANCHECK: POST-SHIPMENT VERIFICATION: SCHLUMBERGER ASIA SERVICES LTD., MUMBAI, LICENSE D355904 REF: USDOC 05731 ¶1. Unauthorized disclosure of the information provided below is prohibited by Section 12(c) of the Export Administration Act. ¶2. Export Control Officer (ECO) Paul Cushman and BIS FSN Prem Narayan conducted a Post-shipment Verification (PSV) at Schlumberger Asia Services Ltd. (SAS),Mumbai, on July 11, 2007. ¶3. BIS requested a PSV at SAS, a private sector company located at: N.S.E. Estate, W.E. Highway, Goregaon (East),Mumbai 400063, Tel: 91-22-2685-4547, Fax: 91-22-2685-4222, Email: dhiraj@bombay.oilfield.slb.com. SAS was listed as the Ultimate Consignee and Oxford Institute for Energy Studies Inc., Dubai, U.A.E. as the Foreign Purchaser for 20-detonator assemblies and 10 secure igniter assemblies controlled under ECCN 3A232. The license applicant was Schlumberger Technology Corp. (STC),Sugar Land, TX. ¶4. ECO along with FSN Narayan met with Rajesh Puri, Manager, Oilfield Services, Mumbai; Dhiraj Dudeja (Dudeja),Operations Manager-Wireline, India; V.S. Raman (Raman),INM Logistics Manager, and Vikas Kumar Sahu, INM Explosives Officer, SAS. ¶5. SAS representatives were aware of certain BIS regulations. However, they did not recall a previous visit by USG or BIS officials to conduct an end-use check (EUC). Raman provided a copy of the SAS profile, SAS Purchase Order, STC Invoice, Air Waybill, Form BXA-711, STC Shipper's Declaration for Dangerous Goods, and the BIS license conditions. SAS representatives also provided a disposition log reflecting a list of explosives imported under this license and their disposition. In addition, Raman provided a copy of documentation that was sent to BIS Headquarters by STC containing Automated Export System (AES) information, Direct Shipment Record, Air Waybill, Schlumberger Invoice and a letter to the Department of Commerce documenting the first shipment against the subject license. ¶6. Dudeja stated the items on check were imported in February 2007 to be used at the Panna, Mukta, and Tapti oil and gas fields. Panna and Mukta are located approximately 95 kilometers northwest of Mumbai and Tapti is located approximately 160 kilometers northwest of Mumbai. British Gas Exploration and Production India Ltd. (BG) is a British company and is one of the license holders in the Panna, Mukta, and Tapti oilfields. He stated that SAS is one of the world's leading oilfield service providers and has a sizeable presence in India. BG subcontracted SAS for well logging at the Panna and Mukta oilfields. Well logging, also known as borehole logging, is the practice of making a detailed record of the geologic formations penetrated by a borehole. ¶7. Raman stated that the importation of explosives (to include the subject of this EUC) is tightly controlled by the Government of India (GOI). The process involves securing prior approval from four separate GOI agencies and usually requires 12-16 weeks to complete. Raman went on to describe in great detail the importation process and provided copies of all four GOI agency approvals obtained for this transaction. ¶8. Raman stated that igniters, detonators and explosives are imported for use under specific oilfield service contracts for logging and perforation. Schlumberger Technology Center (STC) supplies all the explosive requirements of SAS operations in India. Explosives orders are placed using STC Web Procurement System (SWPS) and approval from the Operations Manager is required. All explosives are identified by uniform part numbers and standard descriptions used by STC. ¶9. Upon delivery, all explosives are stored in a GOI-approved bunker until they are needed on the oil-drilling platform. These bunkers are duly licensed and built in accordance with Petroleum and Explosives Safety Organization (PESO) guidelines as laid out in the Indian Explosives Rules of 1983. The items on check have not yet been employed and are stored in such an approved bunker, which is located approximately 60 kilometers northwest of Mumbai. ¶10. Inventory management (including explosives) is done using LAWSON, A system that tracks the financial and physical movement of SAS inventory. All explosives are transported to the well site in the presence of a SAS representative. Inventory logs are maintained and reconciled monthly by the SAS Field Service Managers. An Explosives Safety Officer audits all storage facilities periodically for safety and compliance as per STC Worldwide Oilfield Service Standards. The SAS Explosives Safety Officer maintains separate inventory logs. These logs cover all importations of explosives covered under EAR, their disposition, and their current location. SAS shared a copy of a log reflecting the STC part number, BG contract number, location of both listed items, and their quantity. ¶11. Dudeja confirmed the stated end-use. He stated that the secure detonator and secure igniter assemblies are used in wire-line logging and in oilfield service operations to detonate an explosive charge down-hole, which perforates the oil well casting, allowing fluids to flow in. ¶12. He stated that the secure detonator is superior to a conventional detonator because radio transmitters need not be switched off while arming the assembly. The exploding foil initiator (EFI) technology makes the secure detonator the safest and most reliable detonator because specific high-voltage, high-current pulses are required for detonation. ¶13. SAS started its operation in India in 1929. It is the leading oilfield services and solution provider firm in India. In addition to the Oilfield Services Division, SAS has two more divisions: Water Management and Energy Management. SAS renders its services to Indian and foreign companies engaged in exploration and production and offers cost-effective, state-of-the-art technology and solutions for superior results. SAS services include drilling and measurement, wire-line, well services, completion, artificial lift, well testing, data and consulting services, integrated project management, information solutions, land and marine seismic, seismic data processing and multi-client data library. SAS has operating bases and offices in the vicinity of all the major oilfields in India. The Indian headquarters of SAS is located in Delhi. Major clients of SAS include Oil and Natural Gas Corporation (ONGC),Oil India Limited (OIL),GAIL India Ltd., Indian Oil Corporation (IOL), Ministry of Petroleum, Reliance, BG, Cairn Energy PLC, Gujarat State Petroleum Corp., Niko Resources Ltd., Selan Exploration Ltd., Hindustan Oil Exploration Ltd. and Essar Group. In FY-2006 and FY-2007, SAS capital expenditure has exceeded 100 million USD. SAS employs approximately 1,500 personnel including 1,200 in Oilfield Services. ¶14. ECO was unable to conduct an on-site inspection since the listed items were warehoused in a GOI-approved bunker where visitors are not permitted. ¶15. Based upon the interview with company representatives and the documentation provided, the legitimacy of SAS was clearly established. Despite the lack of a physical verification, all indications were that the listed commodities will be used in accordance with export license conditions and that Schlumberger Asia Services Ltd. is a reliable recipient of the sensitive U.S.-origin technology in question. (PSCUSHMAN/PNARAYAN) White