Cairn wants 8 more months at KG-OS-6

Vol 7, PW 4 (07 May 03) Exploration & Production

EXPLORATION BLOCK KG-OS-6 is the exception in a string of Indian successes for Scottish oil and gas explorer Cairn Energy.

We understand Cairn wants another extension - this time by eight months - to 'Phase-II' of its minimum work programme at this unlucky block. Authorities have already extended 'Phase-II' by a year to June 2003 but Cairn wants more time.

"We've got till 30th May to tell the government if we intend to move into 'Phase-III'," says a source. "We are committed to drilling two wells, each to a target depth of about 2,500 metres during 'Phase-III'." If it gets the eight-month extension, Cairn wants to bring one of the wells for 'Phase-III' to 'Phase-II' "If this well is successful we will move into 'Phase-III' and drill the second well.

Otherwise we do not want to be held to the second well in 'Phase-III'." 'Phase-III' ends on 30th June 2005. It's been a frustrating geological experience for Cairn during 'Phase-II' in this block: during 2001, it drilled dry well KG-A-1 to a target depth of 4,031 metres.

Severe subsurface flows of fresh water hampered drilling of the second well KG-6-1 later in the year. Cairn made five attempts to drill this well but failed and suspended drilling after 39 days and the rig demobilised.

Yet Cairn is not about to give up: it wants to re-drill the second well and is ready with a detailed geo-technical site survey with a solution for the shallow water hazards it encountered earlier. Patiently Cairn awaits the all-important word from Shastri Bhawan.

Cairn and Petrocon - formally Videocon Petroleum - each hold 50% of KG-OS-6.