Cairn India’s effort to scale up production from the Rajasthan oilfields is dependent on the Cabinet, as it goes beyond what has been prescribed in the contract.
“It is not a matter which can be decided by the Ministry for Petroleum & Natural Gas, but would require cabinet approval,” a senior official said. This is because exploration is not permitted within an area that has been delineated after discoveries of hydrocarbons for production.
Higher resource base
Cairn has been saying that its studies and assessments show potentially higher resource base in Rajasthan in 3,111 sq. km., which has been delineated by the company from the original 11,000 sq. km. Simply put, in this 3,111 sq. km., the company cannot undertake exploratory work.
According to the Ministry, the permission is being sought beyond what has been prescribed in the production sharing contract (PSC). Rajasthan block is a pre-licensing round PSC. Cairn says both PSC and Mining Lease for the block have enabling provisions that allow carrying out exploration work in the area. The total resource base in Rajasthan now provides a basin potential to produce 300,000 barrels of oil a day. But this is subject to further investments, which is dependent on regulatory approvals, Cairn has been maintaining. At present, the company produces 1,75,000 barrels of oil a day.
On July 12, Cairn had sent a proposal to the Ministry for continuing exploration operations in RJ-ON-90/1. The company said it had undertaken extensive geo-technical evaluation work to assess the overall exploration potential of the block.
Till date, 25 discoveries have already been made in the block, and six discoveries have been developed or are being developed according to the approved field development plans across three development areas (Mangala, Bhagyam, Aishwarya, Saraswati, Raageshwari Oil and Raageshwari Deep Gas).
Field development plans have also been submitted for another four discoveries and these are at various stages of approval process (Shakti, Kameshwari West-2, Kameshwari West-3 and Kameshwari West-6). Around 12 discoveries still need to be appraised and together with the prospective resources, these are being considered for the proposed exploration and appraisal drilling campaign.
The exploration and appraisal programme beyond the minimum work programme can be agreed through the regular annual work programme and budget process, in consultation with the Joint Venture partner, ONGC. But, the integration of new geological and geophysical studies carried out in the last 3 years need the mandatory approvals.