Cairn Energy discovers oil and gas in Rajasthan

Feb 04, 2003 01:00 AM

UK oil explorer Cairn Energy has struck oil and gas in the impoverished north Indian state of Rajasthan for the third time, raising Indian government hopes of substantial reserves. Although Cairn Energy plans to carry out further appraisal drilling before deciding whether the find is commercially viable, it said it was confident of the exploration block's potential.
The find, in the Thar desert, contains 155 mm barrels of oil, capped with a gas reservoir. It more than doubles Rajasthan's known oil reserves to 34 mm tons from 14 mm tons, said India's Petroleum and Natural Gas Minister Ram Naik. "The results of the discovery...would boost the potential of more discoveries in Rajasthan," the minister said.
"To justify a pipeline, we would anticipate about 12,000 bpd from the area," said Cairn Energy's director of exploration Mike Watts, who is visiting the Rajasthan site.

This level of output looks certain to be reached if production from the latest find -- estimated at 400 to 500 bpd -- iscoupled with Cairn Energy's bigger find at nearby Saraswati.
"The two together will easily surpass the 12,000 bpd threshold," Mr Watts told. Cairn Energy is particularly enthused that it has now found oil three times in a row on the vast block, RJ-ON-90/1, which is 5,000 km square.
"We see the potential for more of the same size to be repeated across the acreage which measures 20 or 24 times the size of North Sea blocks," said Mr Watts.

Rajasthan is a poor state bordering Pakistan, much of it semi-desert, which has been a mining area for centuries: it supplied marble for the Taj Mahal. Tourism is currently one of the state's main earners, with foreign visitors flocking to its famous camel fair.
Increasing the find's viability is the fact that gas and water have been found in there, said Mr Watts. Water in the oil reservoir can be used to push the oil to the surface, increasingly the recoverable amounts and making exploitation more profitable.

Cairn Energy is the sole explorer on the block, having bought out Anglo-Dutch oil giant Shell, though it has agreed to give a 30 % stake to India's state-owned Oil & Natural Gas Corp if the field goes into production.
India currently imports about 70 % of its oil and petroleum.

Source: BBC
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