Re-exploration: Moily to take a final call on giving nod to Cairn

Richa Mishra New Delhi | Updated on August 12, 2013 Published on August 12, 2013

Company has surrendered two-thirds of the Barmer field

The buck stops with Petroleum & Natural Gas Minister M. Veerappa Moily, on whether Cairn India will get to re-explore the surrendered area of Barmer oilfields in Rajasthan.

Exploration policy

Officials in the Ministry are of the view that a return on nomination basis of any area of Barmer block, Rajasthan, previously surrendered by Cairn India, would go against the country’s oil and gas exploration policy (New Exploration Licensing Policy).

This is in line with what the Directorate General of Hydrocarbons (DGH) has expressed. In other words, Cairn will have to participate in future licensing rounds and win the surrendered area. A senior Ministry official said: “Since NELP came into existence, no area has been offered on nomination basis.” However, the final call will lie with Moily. The Minister can take it to the Cabinet for approval, the official was quick to point out.

Barmer reserves

According to Cairn, Barmer fields may hold more reserves than initially assessed. This is based on the comprehensive review of the block’s resource potential undertaken by the joint venture — Cairn India (70 per cent) and ONGC (30 per cent).

To exploit more oil, it wants to explore that area of the block which has been relinquished according to the exploration norms. Almost two-third area of Rajasthan block — RJ-ONN 90/1 — has been relinquished. The block was contracted prior to the NELP Rounds.

The block initially covered 11,108, licence to explore and develop was given for 10,558 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, as prescribed in the norms.

The joint venture today has 3,111 area of the block and produces close to 180,000 barrels of oil a day. It is targeting to close the fiscal 2013-14 at a production rate of 200,000-215,000 barrels of oil a day from the block.

Meanwhile, Anil Agarwal, Chairman, Vedanta Group, met the Minister last week and sought early approvals to ramp up output from Cairn India’s domestic assets.

He is understood to have said that to enhance the production from the Rajasthan block, Cairn had submitted several applications to the Block Management Committee (which overseas operations), the DGH and the Petroleum Ministry.

The pending approvals include the proposal to drill more wells in Bhagyam fields of the block and the budget to start drilling by October, to increase production from Aishwariya field to 25,000 barrels a day, Mangala Enhanced Oil Recovery plan, and approval for an integrated development plan for development expenditure in the Rajasthan block.

In addition to sustaining and increasing production from five oil producing fields, the company is also working towards commercialising 20 other discoveries in the Rajasthan block.

Further renewed exploration will help realise an estimated 530 million barrels of oil equivalent (oil and gas) of gross recoverable prospective resource.

Published on August 12, 2013
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