The Telegraph
Friday , November 16 , 2012
Since 1st March, 1999
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Cairn wants to hike output

New Delhi, Nov. 15: Vedanta Resources chairman Anil Agarwal has sought the intervention of newly appointed oil minister M. Veerappa Moily to help his group firm Cairn India to raise output from the Rajasthan oilfields by allowing further exploration of the prolific block.

“The provisions of the production sharing contract permit exploration and the government does not lose any revenue by permitting exploration. The approvals should be granted in a simple manner, without any delay,” Agarwal has written to Moily.

Moily, who took over as the oil minister on October 29, promised to look into the matter “for an early resolution.”

Cairn India, which aims to double its output to 300,000 barrels per day, wants to further develop the Mangala, Bhagyam and Aishwariya fields and 22 other oil and gas finds in the 3,111 sq km area delineated as development area.

The directorate general of hydrocarbons (DGH) is of the view that exploration cannot be permitted within an area that has been delineated after discoveries for production of hydrocarbons.

Cairn said the production sharing contract defined a development area as one that not just included a discovery or a group of discoveries but also “area of potential petroleum deposits”.

The Barmer basin in Rajasthan, Agarwal said, holds an estimated 7.3 billion barrels of oil and gas in-place reserves having a production potential of 300,000 bpd.

“However, this potential can be realised only if the joint venture of Cairn-ONGC is encouraged to undertake further exploration,” Agarwal wrote.

Cairn holds 70 per cent interest in the Rajasthan block, while state-owned Oil and Natural Gas Corp holds the rest.

Meanwhile, the DGH has given an approval to Reliance Industries to drill a well as part of a $1.53-billion plan to develop four satellite gasfields around the flagging main fields in the eastern offshore KG-D6 block.

The permission is for one development well KG-D6-G2 in the Dhirubhai-19, or D-19 field.

The field is one of the four satellite gasfields whose development plan was approved in January this year, the regulator wrote to the oil ministry.