Cairn to ramp up output of Rajasthan block by 25,000 bpd

Cairn India Ltd. (Amalgamated) | Oil Exploration | Oil & Gas | BSE: 532792 | NSE: CAIRN

19 Jan 2012 Evaluate

The government has approved Cairn India's plan to ramp up crude oil output from its Rajasthan block by an additional 25,000 barrels per day from the Bhagyam discovery, the second biggest oil field in the block after Mangala. Bhagyam can commence production in less than one month and can reach a peak output of 40,000 barrels this year, depending on regulatory approvals and supporting infrastructure.

Cairn is already producing 125,000 barrels per day from Mangala field in the same block which can be ramped up to 150,000 barrels per day. As per the approved development plan, Aishwariya, another discovery, can produce 10,000 barrels per day subject to regulatory approval. Cairn's proposal to commence production from Bhagyam was delayed because the government wanted to verify certain technical parameters of the field by a third party. The third party report was submitted to the management committee (MC) on Oct 10. MC, chaired by director general of hydrocarbons (DGH), is the apex decision-making body for managing affairs of the block. Approvals to ramp up crude oil output from the block was also delayed due to a rift between Cairn and its partner, state-run ONGC over royalty issue. The dispute was settled in December after new promoter of Cairn India agreed to pay its share of royalty and ONGC gave a no objection certificate to facilitate transfer of a controlling stake. ONGC holds a 30% stake in the block.