Vedanta's entry may boost Ravva-Cambay

The Ravva oilfields in the Krishna-Godavari basin of Andhra Pradesh and Cambay basin in Gujarat took a back seat ever since Cairn India's Rajasthan block took centre stage, say Cairn's partners in these fields. With Vedanta Resources now taking the reins, the partners expect it would turn out well for both these fields.

Videocon Industries holds 25 per cent stake in the fields, while Cairn India, operator of the block, holds 22.5 per cent. State-run Oil and Natural Gas Corporation (ONGC) holds 40 per cent stake in the fields and Ravva Oil Malaysia holds the rest 12.5 per cent. the consortium has been managing the fields since 1995.

“Cairn has been busy investing all its financial and manpower resources in the Rajasthan field, thus sidelining Ravva. With Vedanta coming in the consortium, further investments could be made in the field, which will enhance production,” said a consortium member, on condition of anonymity.

The Ravva fields account for seven to eight per cent of domestic crude oil requirements. The field saw a production fall of 44 per cent last year. As reserves deplete, the field is producing around 40,000 barrels of oil a day and 1.7 million standard cubic metres of gas.

“Vedanta is a very aggressive player and Ravva has a large oil potential. The field stands to gain with a new partner taking over the reins,” said Venugopal Dhoot, Chairman, Videocon Group.

Industry insiders say Ravva could have another 80-90 million barrels of recoverable reserves.

Another consortium member said, “Post Cairn's Rajasthan discovery, priorities could be different. However, we do believe that these fields (Ravva and Cambay) are matured and whatever development had to happen has taken place. Nevertheless, the consortium members are discussing what future the fields hold.”

So far, around Rs 3,000 crore has been invested in Ravva. Videocon, though it did not reveal its investments in the field, said it had recovered all the investments made so far. Oil contributes around Rs 1,000 crore to Videocon's revenues, with Rs 500 crore coming from Ravva.

Apart from the Ravva field, Cairn India owns and operates a petroleum exploration and production asset in the Cambay basin of Gujarat. Additionally, the company holds stakes in 11 blocks in India and one in Sri Lanka.

Cairn India is the operator in the Cambay basin, with ONGC holding 50 per cent stake and Tata Petrodyne having 10 per cent. The consortium plans to drill another three wells in the basin, at an investment of Rs 400 crore.

“As long as technical expertise remains and interest of the partners does not get compromised, ownership changing hands does not really matter. We will have to see what changes Vedanta will bring in now,” said an official from Tata Petrodyne.