Saline water find to help raise Cairn's oil output

Cairn India, which found India’s largest oil field in Rajasthan in over 30 years, has discovered a saline water reservoir near its oil field that will help pump crude oil to the ground level and enhance production.

Had this saline water not been found, the Indian subsidiary of Cairn Energy plc, would have resorted to other costly recovery methods. Oil from Cairn’s field has high wax content, making it difficult to suck out oil from the oil field. However, the oil has less sulphur content which enhances the output of petroleum products.

Under this recovery method, saline water has to be heated above 40 degree Celsius and pumped into the oil field. As a result, water will flush out the waxy crude oil to the ground level. For every barrel of oil, the company will have to inject 1.1 barrels of water. One barrel is equal to around 160 litres.

“The saline water injection from the reservoir will help in enhancing oil production which will begin in the second half of 2009,” according to a source close to the development.

The water injection process, usually resorted to after a few years of oil production from a field and decrease in pressure, is not likely to increase the cost of producing the oil, which is pegged at $4 a barrel, the company said.

Further details about the water reservoir were not disclosed, but a company official said it would be sufficient to meet the oil production demand.

The company is expected to produce oil at a peak rate of 175,000 barrels per day, or around 20 per cent of the country’s total oil production, by 2012. This peak rate could be maintained for around four years. However, the company plans to extend this period by employing enhanced recovery methods.

India consumed 3.03 million barrels per day of crude oil in 2007-08 and its imports constituted more than 75 per cent of the total demand.

The company, at a later stage, will also add certain polymers to the water it injects into the field which will increase the recoverable reserves from the oil field by over 42 per cent to around 1 billion barrels from the current 700 million barrels.

The enhanced oil recovery method would inflate the company’s cost of producing the oil to $8-12 per barrel from the current around $4 per barrel.

Water has a specific gravity of around 1, while the Cairn oil has a specific gravity of around 15. So when water is used to flush out oil, initially water will skim over the top of the oil layer and production will not be huge. However, when polymers are added to the water, the specific gravity of the mix will increase to around 20, which can then flush out as much oil as possible, a former Cairn India geologist explained.