Surrendered area may have more oil than assessed

Barmer oil fields in Rajasthan may hold more reserves than initially assessed, feels the operator Cairn India. This is based on the comprehensive review of the block’s resource potential undertaken by the joint venture — Cairn India and ONGC.

But, to exploit more oil, the joint venture, in which Cairn has 70 per cent stake and ONGC 30 per cent,would need Government approval as it would mean exploring that area of the block, which it has relinquished according to the exploration norms.

Cairn now wants to get the relinquished area back and then explore, a senior Petroleum Ministry official said. Informal discussions on the issue have already taken place.

The logic behind wanting to re-explore the area is that at the time of surrendering, no one knew the prolific nature of the block.

Almost two-third area of Rajasthan block — RJ-ONN 90/1 — has been relinquished. The block initially covered 11,108 sq km and licence to explore and develop was given for 10,558 sq km. After completion of each exploration phase, which is divided into three, the joint venture had to relinquish certain per cent of the unexplored area to the Government. Today, the joint venture has 3,111 sq km area of the block.

More crude oil would mean reducing dependence on import. Crude oil production from Rajasthan block has reduced oil imports bill by Rs 50,000 crore and contributed Rs 19,000 crore to the national exchequer in terms of royalty, cess and other statutory levies since production started in August 2009.

Recently, Cairn had said that following a comprehensive review, the Rajasthan block’s resource potential was estimated at 7.3 billion barrels of oil equivalent (oil and gas) gross in-place from the current area, up from 3.1 billion barrel of oil equivalent.

The first estimate of the area had showed a resource potential of 2.5 billion barrels of oil equivalent gross in-place.

Cairn-ONGC currently produces over 175,000 barrels of oil a day from the Rajasthan block and wants to end the fiscal 2013-14 at a production rate of 200,000-215,000 barrels of oil a day.

Given the new evaluations of the existing area, the total resource base now provides a basin potential to produce 300,000 barrels of oil a day. This is equivalent to approximately 40 per cent of India’s current crude oil production.

If the contractor is allowed to re-explore the relinquished area then the output potential may go further up.

To date, 25 discoveries have been made in the Rajasthan block.

(This article was published on April 8, 2013)
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