| |
South Asia focus paying off for Cairn
The South Asia focus of Europe’s biggest independent oil company is certainly paying dividends for Scottish registered Cairn Energy.
Norman Murray, the company’s chairman, is delighted with progress, pointing out that 2004 had been the busiest year in Cairn’s history and growth prospects are good for 2005.
The value of Cairn was transformed in 2004 by the Mangala oil discovery in Rajasthan, India. A further 11 discoveries on the block have highlighted the prospects for the acreage and the importance of this new petroleum province to both Cairn and to India.
Cairn focuses its activities on South Asia. The Group holds material exploration and production positions in west India, east India and Bangladesh along with new exploration rights in northern India and Nepal.
India currently imports approximately two million barrels of oil a day (bopd). It produces 650,000 barrels a day itself of which 50,000 bopd comes from the Cairn operated Ravva field.
The Mangala field is the biggest discovery in India for 22 years and the draft field development plan has been submitted to Cairn’s joint venture partner ONGC and the government. Development plans have also been submitted for the Aishwariya, Saraswati and Raageshwari discoveries.
“The anticipated approval for these plans is the end of 2005. We are consolidating and building on the exploration successes of 2004 and moving at pace to ensure that production begins from Mangala at the end of 2007,” said Murray.
Cairn last month received formal approval from the government for an 18 month extension of the exploration licence for further appraisal over 2,884 square kilometres of acreage in the north and west of the Rajasthan block.
This appraisal area incorporates the Bhagyam and Shakti oil fields as well as several structures requiring appraisal and intervening tracts of untested acreage. One such structure, the N-I structure, has been successfully tested by the N-I-2 well which lies between the Bhagyam and Mangala fields.
The N-I-2 well encountered 21 metres of net pay in high quality Fatehgarh reservoirs.
A single cased hole test was conducted and the well flowed at a stabilised rate of 2,300 barrels of oil per day of 24 degrees API oil on a 48/64 inch choke.
Preliminary estimates for the field in-place volumes are between 35 and
70 million barrels.
The N-I discovery highlights the potential of the acreage between Bhagyam and Mangala where a 320 square kilometre 3D seismic survey is planned.
In addition, an application for an extension of the southern area of the block has been submitted.
Elsewhere in Rajasthan, Cairn continues to drill a range of exploration and appraisal wells. Recent wells have not encountered commercial hydrocarbons but provide useful low cost information to delineate the extent of the play in the Northern Area.
NELP (New Exploration Licensing Policy) V has attracted an unprecedented level of international interest in India with very competitive bidding. Along with its joint venture partner, ONGC, Cairn has submitted nine bids for both onshore and offshore blocks including three in Rajasthan. For two of these blocks Cairn and ONGC have been joined as a bid partner by ENI.
Bidding for the blocks closed on 31 May and it is anticipated that the winning bids for NELP V will be announced by the government on 31 July and contracts signed by the beginning of October.
Following successful in-fill drilling campaigns on the Lakshmi (offshore north-west India) and Sangu (offshore Bangladesh) gas fields, the group’s entitlement production for the first five months of 2005 was 27,633 barrels of oil equivalent per day (boepd) net to Cairn. Production is in line with the company’s expectations. Full year entitlement production for 2004 was 22,789 boepd.
In the deepwater block, in the K-G basin off the east coast of India, which was partially farmed out to ONGC, a three well drilling programme will start in the next few weeks. Cairn has retained a ten per cent interest in this block.
In Nepal, Cairn is carrying out studies on five exploration blocks and is continuing to monitor the political situation.
|
|
