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Cairn India to dig 100 more exploration wells in Rajasthan block

Cairn India, the majority-owner of the Rajasthan block that produces a fifth of India’s crude oil, expects to drill 100 new exploration wells in Rajasthan over the next three years in search for new oil deposits, the company said.

The company currently produces about 175,000 barrels of oil per day (8.5 million tonnes per year), or almost a fifth of India’s total production of about 48 million tonnes per year.

The company said it intends to raise production rates to 200,000 to 215,000 by March 2014.

“The company plans to undertake an aggressive exploration and assessment drilling program in the block with 100 wells planned in a three year period.” it said today.

It said new 3D seismic data acquisition and processing will cover more than 50% of the Rajasthan block area. “The tendering process is in final stages,” it said.

The strategy behind the aggressive exploration activity in the block is both to extend proven plays and to test new plays, Cairn India, owned by Vedanta Resources, said.

“Under the proven plays category, our plan is to drill prospects with the largest risked volumes first. Under the new plays category, the plan is to drill the best play openers and the least risky prospects first. The 100 E&A exploration wells target gross recoverable risked prospective resources of 530 million barrels of oil equivalent. The drilling in the first year is expected to test around half of the prospective resource volumes,” it said.

It found oil in the southern part of the block, in a new well called Raageshwari-South-1. In all, nearly 26 different discoveries (areas) of oil has been found so far in the block. It has, however, commercialized and started production only at less than half a dozen of them.

Companies usually start off with the biggest discoveries, and tie in the smaller ones later.

“Efforts to monetise 20 other discoveries (including Barmer Hill) in the block are ongoing… As a step towards this, the development plan for the Barmer Hill formation has been prepared and submitted to the joint venture. Production from the Barmer Hill is expected to commence in this financial year,” it said.

In the Barmer Hill formation, the operator will utilise state-of-the-art fracture stimulation and horizontal well completion technology to monetize this significant low permeability resource, it added. Development plans for two other satellite discoveries in the block have also been submitted.

The Rajasthan block is currently producing oil from five oil fields — Mangala, Aishwariya, Saraswati, Raageshwari and Bhagyam.

It said well production at Bhagyam field had not been as per expectations and there was need to drill more than the plan approved number of wells. The planned well count consists of 81 wells, of which 66 have been drilled.

“The joint venture currently has approvals to drill over 30 wells, including the remaining FDP wells during FY2013-14 to help increase field production levels. Approvals for additional infill drilling later this year is currently being sought to enable the FDP approved rate. These additional wells will be utilised as part of the planned Bhagyam enhanced oil recovery project,” Cairn India said.

The Aishwariya field commenced production in March 2013 and reservoir performance has been in line with expectations, it said. The field is expected to ramp up to the plan approved rate of 10,000 bopd in coming months as additional wells are drilled and completed. A total of seven development wells have been drilled in the field so far, it added.

The Raageshwari and Saraswati fields continue to cumulatively contribute over 500 bopd towards the total production from the block. “The availability of the integrated processing and evacuation facility has reduced operating costs and has accordingly made these marginal fields economically viable,” Cairn India said.

Currently, drilling operations in the block are progressing with two drilling and two completion rigs. The JV has already contracted two more drilling rigs which are expected to arrive and commence operations during this quarter. The JV plans to contract five additional drilling rigs later this year to support the targeted work programmes.

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