Cairn eyes 300 mn additional oil barrels through enhanced recovery: CFO

The upstream company has hired fracking experts to unlock 'tight oil', connected pipeline to Barmer refinery

Cairn Oil & Gas is firming up plans to extract up to 300 million incremental barrels from the Mangala-Bhagyam-Aishwarya (MBA) oilfield grouping in Rajasthan’s Barmer, using enhanced oil recovery (EoR) techniques, its Chief Financial Officer (CFO) Hitesh Vaid told Business Standard.

 

The country’s largest oil and gas producer is investing close to $200 million into Alkaline-Surfactant-Polymer (ASP) flooding and is already on track to extract up to 30 million incremental barrels of oil from the legacy oilfields in Mangala.

 

Producing since 2009, Mangala oilfield is the largest onshore oilfield discovered in India. "Our first effort is to manage the natural production decline from our existing fields. We will continue to drill infill wells. We spend $100-200 million annually on drilling additional wells. But for the past one year, we have been discussing ASP, which is the next level of recovery," Vaid said.

 

The technique also works in tandem with the company’s existing operating concept of having clusters of wells, or wellpads, where 5-15 wells connect to each other horizontally and laterally.

 

"In one of the clusters, we have started executing ASP on a larger scale. We have also awarded the tender for establishing the infrastructure needed to process the chemicals. Work is ongoing for 6-8 months now," Vaid said.

 

The project is halfway through, and Cairn plans to begin injecting the chemical compounds by mid-2025. A relatively new introduction to India, ASP was deployed by state-run ONGC in 2019 at the Viraj oilfield in Gujarat's Cambay Basin.

 

Cairn has made 38 discoveries in the massive RJ-ON-90/1 onshore block spread across 3,111 km, of which 10-12 are currently being produced from. In the block, the company has also invested in unlocking 'tight oil' formations and is working on creating a plan to extract from such formations in 3-4 months, Vaid said.

 

Tight oil is a geological rock layer containing oil, but with very low permeability, which means oil cannot flow freely without advanced extraction techniques like hydraulic fracturing. Cairn has hired 25 experts from Canada and the United States who have experience of working on hydraulic fracking.

 

According to latest government estimates from 2018, recovery level is 60 percent for oil fields and 80 percent for gas fields in India. Enhanced extraction is often required for increasing oil production beyond what is achieved by naturally flowing vertical wells.

 

The extraction of oil and gas resources is a complicated, strenuous process and ER techniques involve changing the chemical and physical properties of the formation fluids and rocks to recover the remaining crude oil. This could involve infill drilling, hydraulic fracturing and drilling horizontal and multilateral wells.

 

Link with Barmer refinery

 

A pipeline linking Cairn's facilities in the MBA oilfields has been established to Hindustan Petroleum Corporation Ltd’s (HPCL) upcoming 9 million metric tonnes per annum (mmtpa) capacity refinery also located in Barmer. "They (HPCL) have built one full pipeline from the shore to the terminal. But they also built connectivity which reaches up to our gate," Vaid said.

 

With pre-commissioning of multiple units already being done, the refinery was set to begin processing crude oil in the first few months of 2025, but is now looking at a commissioning deadline of end-2025, officials told Business Standard last month. Announced in 2013, India’s largest greenfield integrated refinery and petrochemical complex, the Rajasthan Refinery Project (RRP), has seen the deadline being extended multiple times.