Vol 3, PW 16 (01 Sep 99) Exploration & Production

Shell India Production Development is preparing to reduce the size of its India office ahead of the transfer of operatorship of its Rajasthan concession to Cairn Energy.

This is subject to government approval and as yet no firm date has been fixed for the transfer. Derek Corbishley, Chief Executive, is leaving India after four years for a new job within the Shell group, while staff numbers at the companys Tolstoy House office in Delhi will be substantially reduced.

Shells departure from the exploration scene in India comes as the company continues testing from its surprise oil strike on 15th August - Indias Independence Day - from a second exploration well (GUDA-2) in the Barmer district of Rajasthan. Shell refuses to speculate on the reserves or production potential of Barmer, except to say that with tests carried out on Wednesday (18th August) it now possesses all the data required to make an accurate assessment.

This is expected shortly. Indian sources, however, tell this report GUDA-2 has been plugged as lack of infrastructure makes local storage impossible.

It is also learnt that the oil-bearing zone at GUDA-2 is two metres thick, while the Oil to Gas Ratio (OGR) is approximately 1 cubic metre of oil to 50 cubic metres of gas. It is as yet unclear if the sands above the oil-bearing zone contain oil.

An initial assessment of the grade puts it at a "clean" 35-38 API, with no nitrogen or hydrogen sulphate. A final analysis is only possible when the flow rate stabilises.

This report learns Cairn Energy is planning an extensive seismic survey of the area before embarking on a programme to drill appraisal wells.