Cairn Energy to drill near Shell's Hazira terminal

Vol 8, PW 5 (02 Jun 04) Exploration & Production

Cairn Energy is set to drill an exploration well on land awarded to Shells Hazira LNG terminal onshore Gujarat.

Cairn has identified a drilling location in the marshy transition zone of the CB-OS/2 block and is talking to Shell for permission to begin drilling. The location (for well CB-B-2) is outside the actual LNG terminal but within the large portion of land that Shell has in that area, we are told.

When Shell approves, Cairn will begin drilling. The well design has been done, sub surface objectives identified and materials are available, we learn.

Only agreement with Shell and the Gujarat Maritime Board is pending. Cairn plans only one well in this area and will not tender for a rig.

Instead it will move one of its Rajasthan rigs south. The well will be shallow and drilled in the northern extension of the Gauri accumulation.

As with its Lakshmi and Gauri fields in the same block, Cairn is looking for gas, not oil from the new drilling location. From early last year, Cairn focused its exploration in the transition zone located in marshy land of CB-OS/2, which is primarily an offshore block.

Last year, Cairn evaluated old seismic data and also shot extensive 2D in the transition zone, identifying two drillable prospects. In February, Cairn drilled its first well CB-X-1 in the transition zone and struck gas.

A discovery notification was issued the same month and a discovery report followed in March. We understand Cairn is now busy preparing a Declaration of Commerciality for this discovery.

Its not a massive discovery, but there are sufficient reserves to make production commercially viable, says a source within the CB-OS/2 consortium that includes ONGC and Tata Petrodyne.

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