Cairn India and its partner ONGC have restarted exploration activity in the discovered Krishna Godavari basin onshore block. Cairn had discovered oil and gas in its East Coast block in August 2010.

The initial discovery in one well had shown a flow of 75 barrels a day of oil and 0.27 million cubic feet a day of gas. It is light crude oil, according to sources. Light crude oil flows freely at room temperature and receives a higher price on the commodity markets because it can yield a higher percentage of petrol and diesel.

Cairn India's exploration campaigns had taken a backseat in India as it got involved with the proposed stake sale of the parent, Cairn Energy to Vedanta Resources. However, now with the deal inching closer to reality, the company has overcome uncertainty.

Sources in the know of the development said that after re-processing the technical data of the onshore block KG-ONN-2003/1 this well is being drilled based on the results from the first well.

Drilling one onshore well costs around $35-40 million. Cairn India has a participating interest of 49 per cent, and is the operator. ONGC holds the balance 51 per cent.

The initial discovery has opened up a new play in the southern part of KG basin, which is one of the most established basins, sources said, adding that the basin has seen significant success in both shallow and deep waters,

Last year, Cairn had initiated a multi-well exploration drilling campaign in the block that it had won in the fifth round of the New Exploration Licensing Policy (NELP-V). Cairn already has experience in the prolific East Coast, as it is producing from the Ravva fields.

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