Cairn prepares to develop Ravva deep prospect

Vol 11, PW 22 (20 Mar 08) Exploration & Production
     

After several false starts Cairn India believes the time is right to develop a high pressure, high temperature gas prospect at Ravva, where it is operator.

Known as LO-110 (Late Oligocene-110), this is the only prospect in the relatively deeper part of Ravva but has not yet been developed because Cairn and partners Marubeni, ONGC and Petrocon (formerly Videocon) were unsure if they could secure a good gas price. But with the oil ministry setting a landfall price of $4.20 per mmbtu last year for D6 gas (also from the eastern offshore) Ravva partners are more optimistic than before when the maximum price was $3.50 per mmbtu for Ravva satellite gas.

PETROWATCH learns the Ravva consortium has finally made up its mind that, “now is the right timeâ€‌ to develop LO-110. “There had been previous plans to develop LO-110,â€‌ we hear.

“But in the end the JV decided not to pursue them. Now is the right time.

â€‌ By end-March 2009, the Ravva consortium wants a pre-feasibility study carried out by an external agency, not yet selected. “This is part of the general plan to maximise the full potential of Ravva and prove up any remaining field resources,â€‌ we hear.

Even though it is known as a deep prospect, LO-110 lies in water depths of just eight to 20 metres. But as a high temperature, high pressure prospect it will need a jack-up with a 15,000-psi Blow Out Preventer.

Three years ago when LO-110 first came up on the consortium’s radar screen Cairn drew up a two-well drilling programme. “These two wells were meant to be exploration wells that would be converted to development wells,â€‌ adds a source.

“The minimum CAPEX at that time was estimated at $300m over three years. Costs will be more now because of high rig and service charges.

Each well will now cost about $40m.â€‌ A consortium source believes it is viable to develop this prospect only if gas can be sold at between $4.20 or $4.30 per mmbtu.

Original estimates from Cairn suggest LO-110 could produce 3.5m cm/d over seven years before tapering off.