After a four-year hiatus, Cairn India commenced its exploration drilling programme in the Rajasthan block on Monday.
This will help the joint venture (Cairn, ONGC) to realise the basin production potential of 300,000 barrels of oil a day from the Rajasthan block.
Output projection
“Renewed exploration activity in the block will be beneficial for all stakeholders and will help us realise the estimated half a billion barrels of oil equivalent of risked recoverable prospective resource, which amounts to about a third of the estimated ultimate recovery potential in the Rajasthan block,” the company said in a statement.
The joint venture currently produces 170,000 -175,000 bopd from the Rajasthan block, with a strong focus on ending 2013-14 with a production rate of 200,000-215,000 bopd.
It said that following endorsement of the exploration work programme for the Rajasthan block (RJ-ON-90/1) by the Management Committee on February 14, Cairn commenced drilling the first exploration well in the Barmer Basin.
“This is pursuant to the clarity in policy by the Government of India (GoI), allowing for exploration operations in development blocks,” the statement said.
On January 18, the operating committee of the Rajasthan oilfields, comprising nominees of Cairn India and ONGC, was asked to submit a proposal to scale up output from the fields by the block’s Management Committee.
Cairn holds 70 per cent stake in the block, while ONGC has 30 per cent.
Policy decision
The January meeting was significant, as it followed the Petroleum Ministry announcement that the Government had decided to allow exploration in mining lease areas, which earlier was restricted.
The management committee comprises the Directorate General of Hydrocarbons and Petroleum Ministry representatives as well as nominees of the contractors (Cairn India and ONGC).
Exploration companies have been pursuing the Petroleum Ministry to allow exploration activity within an area that has been delineated for production after discovery of hydrocarbons.
Earlier, the Petroleum Ministry was withholding permission, as it felt that allowing this would go beyond what has been prescribed in the production-sharing contract.
However, after consultations with Law Ministry, it took a policy decision to allow activity in these areas.