Oil India to double oil and gas production by 2010

Vol 9, PW 25 (06 Apr 06) Exploration & Production

Junior state-owned explorer Oil India wants to double its oil and gas production by 2010.

Newly appointed chairman and managing director Mulkhraj Pasrija tells PETROWATCH the company is targeting crude oil production at 7.5m-t/y (134,000 b/d) and gas production at 15m cm/d by 2010 from the present 3.24m-t/y (62,000 b/d) and 6.55m cm/d. Most of Oil Indias oil and gas production traditionally come from Assam, the companys home state.

This will remain true in the future. Pasrija tells us by 2010, Assam will produce 4m t/y (77,000 b/d), frontier areas in neighbouring Arunachal Pradesh and north bank of the Brahmaputra river will produce 1.5m t/y (24,000 b/d) and 2m-t/y (38,000 b/d) will come from fields in the rest of India and overseas.

By 2010, Assam is likely to produce 9m cm/d gas, frontier areas 1m cm/d and the balance 5m cm/d will come from fields in the rest of India and overseas. Oil India now produces about 50,000 t/y LPG.

This will also be increased, said Pasrija. Oil India also wants to set up city gas distribution networks.

Pasrija said natural gas would be transported from the Nahorkatia gasfield to replace costlier naphtha being used by the Numaligarh Refinery. This pipeline will come up to Guwahati and eventually to Dibrugarh and Jorhat where we will set up compressed natural gas vending units, he said.

Pasrija wants Oil India to wean away truckers using diesel. In Assam alone about 500,000 t/y diesel is sold, he says.

We hope a large part of this diesel will be substituted with CNG. Rajasthan is a key focus area for Oil India with a heavy oil recovery project and a gas supply contract in place.

Oil India now produces and sells 700, 000 cm/d gas at a basic price of $2.54 per mmbtu to the Rajasthan State Electricity Board. New gas development wells are being drilled, said Pasrija, and our contract with the electricity board has a trigger to set off a price review once we reach a production of 1m cm/d.

Oil India expects to earn a basic price of $4 per mmbtu once it starts producing 1m cm/d or more form Rajasthan.