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Pratim Ranjan Bose

Kolkata, Oct. 3 Having produced at the plateau rate of 50,000 barrels of oil a day (bpd) since 1999, Cairn India operated Ravva oilfield has finally hit the declining phase in the July-September 2008 quarter.

The ageing field, which has produced more than double the original reserve estimates, currently produces 43,040 bpd of oil on average.

According to industry sources, assuming that production may decline further during the year, the joint venture partners have set the target for 2008 (calendar year) at around 44,000 bpd.

The shallow water offshore field — located in the Andhra Pradesh coastline — also produces approximately 2 mmscmd of gas, half of which is sold at the administered price.

While Cairn was not available for comment, a source close to the development said, “The current performance trend at Ravva is in line with expectations and is consistent with the ultimate recoverable reserve estimates. As with the industry practice, efforts are towards maximising production through infill drilling, exploratory drilling and facilities upgrade.”

The company recently drilled two exploration wells in Ravva and struck small-sized oil and gas discoveries. Currently one such discovery is under extended testing and producing 525 bblspd.

Industry sources, however, feel that the commercialisation of these finds would take time.

Apart from Ravva, the CB-OS/2 joint venture in the Cambay basin is the other major operation of the company. Although a large part of the gas field had hit a declining trend some time ago, Cairn could marginally ramp up production in April-June 2008 through various infill development programmes.

The field currently produces 1.4 mmscmd of gas and 7,586 bpd of oil, up from 1.09 mmscmd and 6,042 bpd respectively in April 2008.

The total working interest of the company was 18,764 barrels of oil equivalent per day (boepd) in the second quarter of 2008, marginally up from the first quarter of 2008 and down from 19,775 boepd in the second quarter of 2007.

As Cairn’s major find in Rajasthan is slated to come into production in the second half of 2009, the performance of Ravva and CB-OS/2 and the crude price may play a major role in the company’s performance in the medium run.

The average price of Brent crude was $121 in April-June 2008. Although the average for July and August 2008 stands at $123 a barrel, the recent meltdown in crude prices may bring down the averages for the July-September quarter.

More Stories on : Performance | Petroleum | Cairn India Ltd

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