Cairn India is awaiting environment clearances to take the output from its Barmer oilfields in Rajasthan to 300,000 barrels a day of oil and gas. At present, it has clearance to produce up to 200,000 barrels of oil equivalent (both oil and gas).
Completing four years of production on August 29, the fields are now producing 180,000 barrels of oil per day and some gas.
Sources in the know of the developments told
Cairn is looking at exiting this fiscal with a production of 200,000-215,000 barrels of oil a day.
Other approvals
Besides the environment clearance, the company said it was awaiting quick decisions on other pending approvals from the Ministry for Petroleum & Natural Gas and the State Government.
Last month, Cairn approached the Prime Minister-led Cabinet Committee on Investments, which looks into issues related to key projects involving investments of over Rs 1,000 crore, for expediting the clearance. The Rajasthan project cost is more than Rs 28,000 crore.
Another key approval that the company is awaiting is for an integrated block development plan for Rajasthan. The proposed plan, according to Cairn, has the potential to reduce the block development time from 36 months to 18 months on average, enabling it to produce faster.
Global practices
The Production Sharing Contract and the Joint Operating Agreement procedures for governance and procurement for block 1 were set back in 1994. “When they were signed, it was not envisaged to accommodate the pace of investment for a large project. It is imperative to revamp the procedures in line with international best practices to provide the operator with the necessary flexibility,” Cairn has said.
The company is also seeking approval of cost recovery of about $1 billion invested by it as exploration and development expenditure. It is also waiting to get the Field Development Plans passed to enable investments in drilling additional wells and implementing the Enhanced Oil Recovery (EOR) project.
The Petroleum & Natural Gas Ministry also needs to decide on freezing the Government’s share of profit petroleum tranche for the block at current level for the next three years submitted, the company said.
More exploration
Cairn India said it was willing to invest over Rs 13,000 crore in the next three years to maximise the block’s production potential. Therefore, it is important that in line with international best practices, the PSC should be extended to the end of economic life of the fields to incentivise additional investments, it added.
The company has also been pushing for the return of areas relinquished post-exploration in the block to the joint venture for further exploration and development of additional hydrocarbon resources. The current policies and procedures do not permit this.
richa.mishra@thehindu.co.in