Cairn awaits nod to raise Mangala oilfield output

Cairn India is awaiting approval of a crucial committee, where its partner state-owned Oil and Natural Gas Corporation (ONGC) is represented, for raising output from its largest oilfield in the prolific Rajasthan block.

Cairn says it is ready to raise output from Mangala field in the Rajasthan block to 150,000 barrels per day from current 125,000 bpd but this needs approval of Operating Committee (OC), which comprises its representative and that of its partner ONGC, industry sources said.

Once OC gives its approval, the proposal would then go to the block oversight panel, called the Management Committee which is headed by the oil regulator, the Directorate General of Hydrocarbons (DGH).

Sources said independent consultants have cerfified oil reserves in Mangala field support increased output as well as the adequacy of surface facilities to handle higher production.

Mangala, the largest of the 25 oil and gas finds made by Cairn in Block RJ-ON-90/1 in Thar desserts of Rajasthan, began production in end August, 2009 and has been producing at the approved peak of 125,000 bpd for the past six months.

Sources said Cairn had in January won approval to start production from Bhagyam, the second-largest discovery in Rajasthan.

While the approved field development plan for Bhagyam envisages a peak output of 40,000 bpd, the MC had for the time being given nod for production of up to 25,000 bpd from the field. Bhagyam is currently producing about 20,000 bpd and together with Mangala, the Rajasthan block is currently at 145,000 bpd.

Sources said the output from Bhagyam was to increase gradually so as to test the reservior and support facilities.

A company spokesperson declined to comment.

Cairn India, which was recently taken over by London-based mining group Vedanta, is the operator of the Rajasthan block with 70 per cent interest while the remaining 30 per cent is with ONGC.

Sources said Cairn believes Bhagyam has an ultimate potential of 60,000 bpd which can be reached with after making some more investment. Aishwariya, the third largest field in the Rajasthan block, can produce 25,000 bpd, compared to 10,000 bpd that it is envisaged to produce from end 2012.

Together, the Rajasthan block has a potential to reach 300,000 bpd (15 million tonne) with other fields in the block contributing 65,000 bpd.

At present, the approved peak output from Rajasthan is just 175,000 bpd -- made up of 125,000 bpd from Mangala, 40,000 bpd from Bhagyam and 10,000 bpd from Aishwariya.