ONGC uses Rajasthan budget to rein in Cairn
ONGC is threatening to halve the $2bn budget at RJ-ON-90/1 in an attempt to rein in partner Cairn, which it believes is rushing development at the Rajasthan block.
"We won't approve the $2bn budget (for 2014-15)," says a senior ONGC source. "Most likely we will approve just $1bn.
" ONGC, he explains, is growing frustrated as Cairn is being less than forthcoming with technical details of its 2014-15 exploration and development plans. ONGC also worries Cairn is being greedy with its ambitious target of almost doubling production to 300,000 b/d by 2018 because Cairn promoter Anil Agarwal is in too much of a hurry to recover the $8.67bn he spent acquiring the company in 2011.
"Cairn is doing what Reliance did at D6," adds ONGC. "They will end up exploiting the field to extract every drop of oil without proper reservoir management.
" ONGC's G&G, drilling and commercial departments are examining Cairn's proposed budget and expect it to be finalised by end-February. "Cairn sent us the financial budget for approval last month (January)," adds a source.
"But it didn't send technical details." ONGC is having to make multiple e-mail requests for basic information, he says.
Cairn plans to drill up to 450 appraisal and development wells over the next three years, using up to 30 rigs. RJ-ON-90/1 produces 195,000 b/d of oil at present.