DGH happy with development plan for Mangala

Vol 9, PW 6 (30 Jun 05) Exploration & Production

Cairn Energy has won oil ministry approval of its draft development plan for Rajasthan exploration block RJ-ON-90/1.

Despite this, the ministry has nonetheless asked Cairn to slightly modify the plan ahead of final submission. The draft plan, in general, has been approved, reveals a source.

But we have made certain comments and asked for some changes. Plateau production, and how long this will last, is one critical area of contention between Cairn and the ministry.

Cairn wants plateau production to extend over four years but the ministry wants it to be increased to seven years. In Cairns development plan, drilling of up to 300 wells is envisaged over the Mangala, Aishwariya, Saraswati, and Raageshwari oil discoveries.

Cairn estimates development will cost about $2.3bn. But the DGH contests Cairns estimate of 1.64bn barrels in-place reserves at these four discoveries, believing a more realistic figure is 1bn barrels.

They have estimated a recovery factor of up to 30%. Otherwise, the DGH is impressed with Cairns draft development plan.

Technically, it is very sound, adds a source. They want to bring in the latest technology and expertise to produce oil from the fields.

Indian officials believe Cairn will need to deploy six or seven onland rigs and drill 100 wells a year to achieve its target. It is not a very difficult task, says one.

These wells will be shallow between 1000 and 1200 metres. It should take about eight or nine days to drill one well.

Cairn is expected to deliver its final (modified) development plan in August. It will take the DGH about two weeks or so to approve the final plan.

If everything goes well, Cairn will begin development drilling by November and hopes to begin producing 125,000 b/d, rising to 150,000 b/d by December.