Cairn first production from Rajasthan in October
Cairns target of first production by April this year from its small southern fields at block RJ-ON-90/1 is looking increasingly unlikely.
Instead, sources at ONGC, which has 30% stake in producing areas of the block, and the oil ministry, which must approve the development programme, tell us first production is more likely to begin in October after the monsoon. ONGC and the oil ministry are very clear that first production in April is not possible, we hear.
Its too short a period to resolve outstanding issues. How can you begin production when the development plan hasnt been approved The latest version of the development plan was only submitted on 31st December.
Cairn is still awaiting final approval for the Mangala, Saraswati, Aishwarya and Rageshwari field development plan first submitted to the DGH on 5th October last year. Other issues also stand unresolved.
Foremost among them a request to merge the exploration and production budgets for work on the block. In January, the issue was discussed during an Operating Committee meeting but the Management Committee must take a final decision - and it is yet to meet.
On 17th January, Cairn CEO Bill Gammell was reported saying first production from the southern Saraswati field would begin in April this year and initial production would be approximately 2000 b/d. Confirms a Cairn spokesman: It has always been our position that first production would begin from the southern fields in April this year and that production from the northern fields would begin at the end of 2007 or early 2008 with peak production reaching 150,000 b/d.
Argument aside, Cairn sees first production from its southern fields as a pilot venture ahead of full-scale production from the larger Mangala and Aishwarya fields in the north of the block. Pilot production will help Cairn assess the special characteristics of Rajasthan crude before commercial production, we hear.
It will also help smooth out any early problems. Cairn will begin producing from one small pool and later from another adjacent pool.
These two pools are small accumulations, we learn. Production will be about 3000 b/d going up to 5000 b/d.