Oil in Mannar basin: phase one done, Cairn keen to go for stage two

Oil explorer Cairn said yesterday it has notified the Government of its keenness to enter the second phase of discovery of hydrocarbon, following the successful completion of initial drilling.

“Cairn Lanka’s successful drilling programme, the first in Sri Lanka in 30 years, has established a working petroleum system in the frontier Mannar Basin. Following this success, Cairn Lanka has notified the Government of Sri Lanka of its intention to enter the second phase of exploration,” the company said in a statement.

It didn’t specify what entails the second phase, but analysts said it suggests further detailed seismic studies and drilling to crystallise the discovery in two wells, which are located in different planes.

Cairn Lanka Ltd., a wholly-owned subsidiary of Cairn India Ltd., said the first phase of the exploration campaign in Sri Lanka Block SL-2007-01-001 involved the acquisition, processing and interpretation of 1,753 sq km of 3D seismic data and a three well deep water drilling programme. The seismic programme exceeded the phase I commitment by 20% and the drilling programme exceeded the drilling depth commitment by 50%.

This programme resulted in two successive gas and condensate discoveries: the CLPL-Dorado-91H/1z well and the CLPL-Barracuda-1G/1 well. The third well, CLPL-Dorado North 1-82K/1, was plugged and abandoned as a dry hole on 14 December 2011.







The operations were conducted safely, in accordance with the highest global standards, within schedule, budget and in compliance with Sri Lankan regulations.

“The support of the Government of Sri Lanka and an effective partnership with the relevant authorities in Sri Lanka were instrumental in ensuring the successful completion of the first phase exploration programme,” Cairn added.

Vedanta Group currently holds a 59.0% shareholding in Cairn India Limited. Cairn India is headquartered in Gurgaon in the National Capital Region, with operational offices in Tamil Nadu, Gujarat, Andhra Pradesh, Rajasthan and Sri Lanka. Cairn India is primarily engaged in the business of oil and gas exploration, production and transportation. Average daily gross operated production was 149,103 boe in FY2011. The company sells its oil to major refineries in India and its gas to both PSU and private buyers.

The company has a world-class resource base, with interest in nine blocks in India and one in Sri Lanka. Cairn India’s resource base is located in three strategically focused areas, namely one block in Rajasthan, three on the west coast of India and six on the east coast of India, including one in Sri Lanka.

The blocks are located in the Barmer Basin, Krishna-Godavari Basin, the Palar-Pennar Basin, the Kerala-Konkan Basin, the Cambay Basin, the Mumbai Offshore Basin and the frontier Mannar Basin.

Cairn Lanka holds a 100% participating interest in the Mannar block in Sri Lanka.

Cairn India’s focus on India has resulted in a significant number of oil and gas discoveries. Cairn made a major oil discovery (Mangala) in Rajasthan in the north west of India at the beginning of 2004.

To date, 25 discoveries have been made in the Rajasthan block RJ-ON-90/1.  In Rajasthan, Cairn India operates Block RJ-ON-90/1 under a PSC signed on 15 May 1995.

The main Development Area (1,859 km2), which includes Mangala, Aishwariya, Raageshwari and Saraswati is shared between Cairn India and ONGC, with Cairn India holding 70% and ONGC having exercised their back in right for 30%. The Operating Committee for Block RJ-ON-90/1 consists of Cairn India and ONGC.

Further Development Areas (430 km2), including the Bhagyam and Shakti fields and (822 km2) comprising of the Kaameshwari West Development Area, is also shared between Cairn India and ONGC in the same proportion.

The Mangala, Bhagyam and Aishwariya (MBA) fields have gross recoverable oil reserves and resources of approximately one billion barrels, which includes proved plus probable (2P) gross reserves and resources of 656 mmboe with a further 300 mmboe or more of EOR resource potential.

The MBA fields will contribute more than 20% of India’s current domestic crude production when they reach the currently approved plateau rate of 175,000 bopd.

The total resource base supports a vision to produce 240,000 bopd (equivalent to a contribution of approximately 30% of India’s current domestic crude production), subject to further investments and regulatory approvals.

In Andhra Pradesh and Gujarat, Cairn India on behalf of its JV partners operates two processing plants, 11 platforms and more than 200 km of sub-sea pipelines with a production of approximately 45,000 boepd.

India currently imports more than 2.4 million bopd of crude oil. The domestic crude oil production is approximately 0.7 million bopd, of which approximately 170,000 bopd comes from the Cairn India operated assets (Ravva, CB/OS-2 and the RJ-ON-90/1).