The Hindu Business Line : Cairn gets DGH nod for appraisal programme

Snapshot
This move of DGH follows a directive from the Petroleum Ministry, asking Cairn India to work on an appraisal programme for the area in consultation with the technical regulator.
This move would help Cairn validate its two recent discoveries in the area.

Richa Mishra

New Delhi, July 18 The Directorate General of Hydrocarbons (DGH) has approved an appraisal programme for Cairn India’s northern appraisal area (NAA) in Rajasthan Basin. As per the approval Cairn would be required to drill five more exploratory wells in the area, sources said.

This move of DGH follows a directive from the Petroleum Ministry, asking Cairn India to work on an appraisal programme for the area in consultation with the technical regulator.

Recent Discoveries

With an appraisal programme in place, Cairn would not only be able to validate its two recent discoveries in the area, but also explore the full potential of the region, sources told Business Line.

The Ministry’s decision asking Cairn to get an appraisal programme approved had gathered significance in the backdrop of the DGH earlier refusing to recognise the two recent discoveries — Kameshwari West-2 and Kameshwari West-3 — in the Rajasthan Basin announced by Cairn.

The DGH had declined the two discoveries on the grounds that both the wells were drilled after the expiry of a minimum work programme period. According to sources, Cairn had notified DGH about Kameshwari West-3 on May 9 and about Kameshwari West-2 on December 16, 2006.

In June 2005, Cairn was granted an 18-month extension (until November 14, 2006) to complete its activities in the northern appraisal area. However, severe flooding in Rajasthan last year had interrupted the work programme leading to ceasing operations in the area.

Further Extension

The company had initiated discussions with the Government for a further extension of part of this acreage to complete its planned work programme. Cairn was given a six-month extension (from May 2007) for the Exploration Phase of the northern appraisal area of RJ-ON-90/1.

The northern appraisal area is turning out to be a high prospect region for Cairn with the company expecting additional discoveries. The potential of the area is in excess of 200 million barrels of oil. Till now Cairn India has made 22 discoveries in Rajasthan Basin. India currently imports approximately 20-lakh barrels of oil per day (bopd).

It produces approximately 7-lakh bopd domestically, of which about 50,000 bopd comes from Cairn India-operated Ravva field on the East Coast.