Cairn eyes bigger output from Rajasthan block

Close on the heels of getting approval for starting production from Bhagyam oilfield, Cairn India is set to get approval for raising output from Mangala field in the prolific Rajasthan block to 150,000 barrels per day.

The Rajasthan block oversight committee, which comprises representatives of the oil ministry and its technical advisor DGH, besides Cairn India and its partner ONGC, may within next few days approve raising Mangala oilfield output by 25,000 bpd to 150,000 bpd, a top ministry official said.

State-owned Oil and Natural Gas Corp (ONGC) and the Directorate General of Hydrocarbon (DGH) have signed on the relevant Management Committee (MC) resolution and the oil ministry representative would do so in next few days, the official said.

Mangala, the largest of the 25 oil and gas discoveries made by Cairn in Block RJ-ON-90/1 in Thar desserts of Rajasthan, began production in end August, 2009 and is currently producing at the approved peak of 125,000 bpd.

The field has proved to be more prolific than previously thought and can produce 25,000 bpd more without any fresh investment, the official said adding Cairn is likely to ramp up output to 150,000 bpd within days of MC approval.

The MC had just a few days back approved beginning of production from Bhagyam, the second largest oilfield in the Rajasthan block.

"Bhagyam has been approved to produce 25,000 bpd of oil," the official said adding the peak of 40,000 bpd was likely sometime later in the year.

With this, Cairn India, which was recently taken over by London-based mining group Vedanta Resources Plc, would end FY12 with an output of 175,000 bpd from the Rajasthan block.

Cairn India is the operator of the Rajasthan block with 70% interest while the remaining 30% is with ONGC.

Industry 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.

For the new peak, the government needs to approve field development and investment plans along with the extension of exploration activities over the rest of the block, they said.