Cairn India makes new Rajasthan oil discovery

Market: Crude oil
09/04/13

Delhi, 9 April (Argus) — Private-sector upstream firm Cairn India has made a new oil discovery in the Rajasthan block in western India after Delhi allowed exploration wells to be drilled in developed areas.

This is Cairn India's 26^th discovery in the RJ-ON-90/1 block in the Barmer Basin, which is also the site of a new 180,000 b/d refinery planned by state-controlled Hindustan Petroleum (HPCL) that will use Cairn's output.

Oil was discovered and tested for the first time in the Dharvi Dungar sands in the Raageshwari-Tukaram area. Previous discoveries were in the shallower Thumbli sands. The amount of oil in place and the potential resource base are under evaluation.

Cairn India last month started production at the Aishwariya oil field in the Rajasthan block, which will lift output from the block by 10,000 b/d to around 185,000 b/d. The block accounts for more than 23pc of India's domestic production and 93pc of the company's output.

Cairn India plans to invest 60bn rupees ($1.1bn) in the next three years and may boost investment to as much as Rs100bn if needed, according to Anil Agarwal, executive chairman at the firm's parent company India-focused miner Vedanta Resources.

Cairn India resumed exploration operations in February, drilling an exploration well in a developed field for the first time in more than four years after the government eased rules for explorers in the oil and gas sector. The company operates and has a 70pc stake in the oil fields in Rajasthan.

The company said the change in government policy will allow it to push towards target production of 300,000 b/d of oil equivalent in Rajasthan. The previous policy barred companies from exploration work in developed fields.

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