Cairn Oil and Gas to spend $1 billion to boost production from Rajasthan fields

Twesh Mishra Barmer | Updated on August 29, 2019

A general view of the Cairn Oil and Gas exploration plant at Barmer in Rajasthan (file photo)   -  AFP

Cairn Oil and Gas, which is part of the Vedanta Group, has drawn up plans to spend over $ 1.1 billion in coming 18 months to improve the crude oil production from the Mangla, Bhagyam and Aishwarya fields in Barmer.

The announcement comes at the heels of Cairn Oil and Gas completing a decade of operations at the Mangla Processing Terminal in Barmer on Thursday. “With implementation of Alkaline Surfactant Polymer (ASP) enhanced oil recovery, we aim to increase the recovery factor from 36 per cent to over 50 per cent. This means that we will be able to extract more than half the crude oil present in the fields,” said Ajay Kumar Dixit, Chief Executive Officer at Cairn Oil and Gas.

Dixit told BusinessLine that the company is awaiting final approvals from the Ministry of Petroleum and Natural Gas to be eligible for getting the benefits under the policy announced for Enhanced Oil Recovery.

“We will make the investment once we get the approvals from the Oil Ministry. The implementation of ASP EOR will raise the average cost of production in Barmer from $8 a barrel to $15,” he said.

“We have submitted all the documents for approvals to be eligible to gain the benefits under the EOR policy,” Dixit added.

In September last year, the Cabinet had approved the policy framework to incentivise enhanced recovery (ER)/ improved recovery (IR)/ unconventional hydrocarbon (UHC) production methods/techniques to improve recovery factor of existing hydrocarbons reserves for augmenting domestic production of oil and gas. The policy proposes systemic assessment of every field for its ER potential, appraisal of appropriate ER techniques and fiscal incentives to de-risk the cost involved in ER projects to make the investment financially viable.

The current production from the Mangla, Bhagyam and Aishwarya fields is to the tune of 135-140 thousand barrels of oil equivalent per day (kboepd).

Cairn Oil and Gas currently produces a fourth of India’s total domestic oil production and targets an immediate production of 300 kboepd by 2020-2021. The target by financial year 2021-22 is to have a production of 500 kboepd.

The writer was in Barmer at the invitation of Cairn Oil and Gas, Vedanta Limited

Published on August 29, 2019

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