Cairn wins 22-month extension at CB-OS/1

Vol 5, PW 24 (30 Jan 02) Exploration & Production

SHASTRI BHAVAN IS so happy with Cairn Energy's performance at CB/OS/1 in Gujarat that it has granted the company a 22-month extension to Phase I of its work programme.

This is the block where Cairn discovered the prolific Lakshmi gasfield, which is expected to begin commercial production this year. Phase I ended on 30th June last year, when Cairn should have relinquished 25%.

But in March Cairn asked the DGH for a two year extension to shoot additional seismic over western and north-western parts of the block. Cairn said if it were "pressed into relinquishing 25% of the block's area now, the hydrocarbon resource potential of that area is highly unlikely to be exploited by any other party as the acreage would be considered too small and difficult to evaluate." Cairn also stressed that in the three-year Phase I it had exceeded the minimum work programme for all three phases.

"This is a case without precedent," reveals a source. "There has been no case so far where a contractor has finished the minimum work programme of all three phases in the first phase itself." We are told that Cairn's "high quality extensive work has led to four multizone hydrocarbon discoveries" and that "integrated interpretation of seismic data is in progress and this may lead to additional discoveries." Shastri Bhavan and the DGH were suitably impressed and early this month Cairn got permission to extend Phase I from 30th June 2001 to 29th April 2003.