Cairn India strikes fresh oil in Rajasthan's Barmer block

Cairn India today announced that it has made its 26th oil discovery in the block near Barmer in Rajasthan, following approval to explore for oil on the block even well after the expiry of the exploration phase.

Cairn India, the operator of the block, said it struck oil in the Raageshwari-South-1 exploration well, which is located in the southern part of the block.

A block oversight panel called the Management Committee approved the exploration work programme for the block on 14 February, after which Cairn India, the operator of the block, commenced the drilling of its first exploration well, Raageshwari-South-1, in the southern part of the block on 25 February.

Cairn India started exploration activity in the RJ-ON-90/1 block, following recent policy clarification by the government, P Elango, CEO Cairn India and member of the board of the company, said, adding that it was the 26th discovery so far in the block.

''Oil has been discovered and tested for the first time in Dharvi Dungar sands in Raageshwari-Tukaram area, where previous discoveries were in the shallower Thumbli sands,'' Cairn India said in a release.

''Technical evaluations indicated ~10 metres of gross oil column within Dharvi Dungar Formation. However, the volumes of oil in place and the potential resource base associated with this discovery are still under evaluation,'' the company said.

''We are delighted with the 26th discovery in the block. This reaffirms our belief that an aggressive exploration drilling programme will help harness the full potential of the Barmer Basin in Rajasthan. This is a step closer towards reserve accretion through exploration led growth,'' Elango said.

Cairn India reported average daily gross production of 205,014 boe (barrels oil equivalent) in Q3 FY2012-13. The company sells its oil to major refineries in India and its gas to both PSU and private buyers.

The main development area in the Block RJ-ON-90/1 (1,859 km2) in Rajasthan includes Mangala, Aishwariya, Raageshwari and Saraswati, and is shared between Cairn India and ONGC, with Cairn India holding 70 per cent and ONGC having right for 30 per cent.

The operating committee for Block RJ-ON-90/1 consists of Cairn India and ONGC.

Cairn India's India focus 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, it has made twenty five discoveries in the Rajasthan block RJ-ON-90/1.

Besides oil blocks located in the Barmer Basin, Cairn India also operates oil and gas blocks in the Krishna-Godavari Basin, the Palar-Pennar Basin, the Cambay Basin, the Mumbai Offshore Basin, Mannar Basin and Orange Basin.

Further davelopment Areas (430 km2), including the Bhagyam and Shakti fields and (822 km2) comprising the Kaameshwari West development area, are 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 1 billion barrels, which includes proven and probable (2P) gross reserves and resources of 636 mmboe with a further 300 mmboe or more of EOR resource potential.

The Rajasthan block currently contributes more than one-fifth of current domestic crude production. The block when fully developed would contribute 300,000 bopd, (more than 35 per cent of India's current domestic crude production).

Cairn is also keen to explore the surrendered area of the block, as it feels that the Barmer region has the capability of producing more oil. The company is in talks with the petroleum ministry for return of the area.