Cairn estimates 150m tonnes in place at RJ-ON-90/1

Vol 8, PW 9 (28 Jul 04) People & Policy

Shell must be regretting the day it decided to sell its stake in Rajasthan block RJ-ON-90/1 to Cairn Energy.

It now appears that the eight oil discoveries on this block total up to the largest onland oil discovery in India after the Gandhar oilfield discovery by ONGC in the Cambay Basin in 1984. In May, Cairn sent the all-important Declaration of Commerciality to the oil ministry for five of the eight fields on RJ-ON-90/1, following approvals by the operating committee and management committee.

PETROWATCH learns the single Declaration of Commerciality covers Mangala, NA, Saraswati, Raageshwari and Greater Raageshwari F fields and estimates in place oil at 150m tonnes. Cairns ongoing appraisal of these fields has shown the sands to be thicker than expected with a net average pay of 85 metres thickness.

Mangala is the biggest field. We understand Cairn has also estimated recoverable reserves at 30m tonnes a 20% recovery factor.

Crucial to note is that Cairns estimate of in place oil and the recovery factor is believed to be very conservative. A source reveals: We were surprised that they gave such low reserves.

We are told in place oil in these five fields together could be at least 200m tonnes. Cairns Declaration of Commerciality also mentions $500m CAPEX to develop the discovery on a crude oil price of $21 per barrel.

Cairns Declaration of Commerciality is currently under scrutiny at the Directorate General of Hydrocarbons. Cairn is also reviewing data (in the Declaration of Commerciality) with the DGH and (licencee) ONGC, adds a source.

Once oil ministry approval is received Cairn will begin working on the field development plan that will spell out the number of wells to be drilled and the production profile. Actual development work will have to await a mining lease from the state government of Rajasthan.