Disappointed that the Tamil Nadu Government has suspended coal-bed methane exploration in the Cauvery basin? Don’t worry. The region promises to be India’s next oil and gas frontier, as a number of recent developments indicate.
Striking gold
Last year, ONGC made three discoveries in this region. Two of them contained oil and gas, and the third only gas.
In January 2007, British company Hardy Oil announced that it had discovered gas in a block (CY-OS/2) in the Bay of Bengal, off the Puducherry coast.
But Hardy couldn’t explore the block fully because the Ministry of Petroleum took it to court, alleging that it was actually an oil discovery, which the company had failed to notify.
The Arbitration Court ruled in favour of Hardy earlier this year, following which the company said it would recommence drilling in that block.
Later in 2007, Reliance Industries found gas in the region (in a block named CY-DWN-2001/2). After six years, it will be in action there again, with commercial production expected to be approved by an empowered committee of secretaries. Earlier, it was thought to be unviable to produce gas from the region, when the price of natural gas was $4.2 per MMBTU. However, now that the price has been raised, to what could well be upwards of $6.5 per MMBTU, gas production will be viable.
In April 2011, Reliance Industries again announced discovery of “rich gas and condensate, in the very first well drilled in the block CY-PR-DWN-2001/3”. It was a block that Reliance won in NELP-III. During testing, 37 million metric standard cubic metres of gas and 1,100 barrels of condensate poured out per day. Reliance has named it Dhirubhai-53. Further work is currently going on.
“There definitely is potential in the Cauvery basin to become a major hydrocarbon producing centre,” said Amol Kotwal, Associate Director, Energy & Power Systems Practice, Frost & Sullivan. He added that the hike in the price of gas would encourage further activity in the basin.
Under-explored area
According to the Directorate-General of Hydrocarbons, the ‘Cauvery Basin’ covers an area of 1.50 lakh sq km, covering 25,000 sq km on land, 30,000 sq km in shallow waters and 95,000 sq km in deep waters. And it is under-explored.
The Directorate speaks of the basin in favourable terms, noting that exploration efforts are “still young”, confined mainly to the land area and close to the coast. It goes on to add that the discovery by Reliance “has opened a new corridor for exploration in Cauvery deep water”. In a more telling statement, it says, “big size, subtle features (are) seen… at deeper levels.”
Even with exploration efforts still nascent, the basin is an “established hydrocarbon province”. It is proven to have a resource base of 700 million tonnes — 430 million tonnes on land and 270 offshore. And, as the efforts of Reliance and Hardy have shown, offshore is what holds out promise.
There is more exploration scheduled to happen. Oil India Ltd has issued tenders for rigs to drill three wells in a shallow water block (CY-OSN-2009/2) in the Gulf of Mannar, between India and Sri Lanka.
Here, it is pertinent to recall that Cairn Energy has discovered gas in the Sri Lankan waters of the Mannar basin. GAIL, too, has issued tenders for rigs to drill three wells on land, in Thanjavur district. It expects to complete drilling by March 2014.
Across various locations, ONGC is set to produce oil and gas from “high-pressure, high-temperature” and “tight” reservoirs. These are oil and gas tanks deep below, which pose various technical challenges. Three such reservoirs are in the Cauvery basin — Bhuganagiri, Periyakudi and Pallivaramangalam. Testing is still under way, but given the thickness of the hydrocarbon-bearing sands, it is clear that the potential is enormous.