Cairn India’s double Barmer discovery to boost India’s NELP-X pitch

Cairn India’s Rajasthan fields’ output is expected to rise to 200,000 bpd as more satellite fields are brought on production

As the country gears up for the 10th NELP round, India’s most prolific basin and the youngest one in western Rajasthan brings another reason to be bullish on the Indian hydrocarbon story. Cairn India operated Barmer oil field, the largest revenue contributor to the Rajasthan state exchequer, has announced two more hydrocarbon discoveries in the prolific Rajasthan block, taking the total in the Barmer district block to 28. The finds have added an estimated 500-600 million barrels of in-place oil resources.

Announcing its quarter results, Cairn India the fastest growing E&P player in the country, reported record revenue from highest ever production from its fields. Cairn India’s Rajasthan fields produced 184,982 barrels of oil per day in the quarter and output is expected to rise to 200,000 bpd at the end of the financial year as more satellite fields are brought on production. Incidentally, the government’s share of profit from the Rajasthan fields went up to 30 per cent from 20 per cent in the last quarter.

“Since the resumption of exploration in March 2013, nine exploration and appraisal wells have been drilled until Q3 FY14 and the initial results have been encouraging with these discoveries and a success ratio of over 50 per cent,” Cairn’s statement said, adding that the finds have added an estimated 500-600 million barrels of in-place oil resources to the existing 4.2 bn boe.

Cairn India contributed Rs 6,400 crore to the central and state governments in taxes and royalties in Q3 alone and Rs 18,800 crore in the first nine months of this financial year. The prolific Rajasthan block has contributed over 200 MMbbls since August 2009, contributing to the country’s energy needs.

“Cairn remains committed to discover new resources and deliver accelerated value from its assets. Our focus on execution is yielding results,” Cairn India CEO, P. Elango said. The renewed exploration and appraisal programme during 2013 resulted in discoveries in Rajasthan, he said.

“Our strategy of active exploration across the portfolio opens up potential for resource accretion in the near term. We are keen on evaluating the blocks in NELP-X announced by Oil Ministry recently, to build on our exploration-led growth in India,” he added.

Cairn successfully tested Aishwariya Barmer Hill at 450 bopd, and recognized it as the 27th Discovery. It discovered V2Y Channel, the 28th discovery, opened up multiple pay zones in low permeability Barmer Hill formation; the zones together have demonstrated a flow potential of about 450 bopd.

During the quarter, approval has been received for the Mangala field Polymer Flood Enhanced Oil Recovery (EOR) programme, which would be one of the largest in the world. The programme is expected to enhance recovery and support production rates from the field in the longer term.

The Aishwariya field performed better than expected, with sequential increase in production during the period supported by additional drilling. Approvals are also in place for enhancing its daily production rate in excess of 20,000 boepd.

Plans are in place to put some of the other satellite fields into production in the next financial year and, in parallel, development plans for others are in preparation. Cairn plans to upgrade the fluid handling capacity at the Mangala Processing Terminal in order to meet the anticipated additional requirements from the increasing water cut as the fields mature.

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