Cairn raises Rajasthan field estimates





The India unit of UK-based Cairn Energy Plc raised estimates of in-place reserves at its Rajasthan field, the country's largest onshore petro- leum deposit, to four billion bar- rels of oil equivalent from 3.7 bil- lion.

Cairn India Ltd also lifted its estimates on potential reserves to 6.5 billion barrels of oil equiva- lent from four billion on Tuesday.

As a result, “the recovery po- tential has doubled from 700 mil- lion barrels to 1,400 million bar- rels, with the plateau production increasing from 240,000 bpd (barrels per day) from the earlier approved plateau production of 175,000 bpd,“ said Rahul Dhir, chief executive of Cairn India.

However, the directorate gen- eral of hydrocarbons, the regula- tor, said it doesn't endorse such numbers. “We have received a copy of the report as prepared by the independent agency,“ said director general of hydrocarbons S.K. Srivastava. “The DGH does not certify contingent resources.
Contingent and prospective re- sources are futuristic resources.“

An official of state-run Oil and Natural Gas Corp. Ltd, which has a 30% stake in the Rajasthan field that's operated by Cairn In- dia, said the DGH hadn't ratified the new numbers, on condition of anonymity. Cairn India said it had informed the regulator of the revised estimates.

“There has been a significant increase in the prospective re- source base. All stakeholders in- cluding DGH were informed re- garding the revised estimates,“ Cairn India spokesperson Manu Kapoor said by email. “In addi- tion to a comprehensive internal review, (consultants) DeGolyer and MacNaughton have con- ducted an independent assess- ment of the majority of the leads and prospects in the prospective resources.“

Shares of Cairn India rose 3.76% on the Bombay Stock Ex- change to close at Rs292.80 on Tuesday. The benchmark Sensex index rose 0.23% to 17,451.02 points.

Cairn Energy jumped to a re- cord in London trading after an- nouncing the start of oil drilling in Greenland and forecasting higher output at its Rajasthan field. It climbed as much as 12% to 425.1 pence, the highest price since the stock began trading in 1989. The shares were at 418.5 pence as of 11:28am local time, valuing the Edinburgh-based company at £5.84 billion (8.75 billion).

Production of the waxy crude oil from the Rajasthan field is around 25,000 bpd, which the company expects to ramp up to 125,000 bpd by the second half of this year.

Cairn India has sales arrange- ments to supply 1,43,000 bpd to refiners such as Hindustan Pe- troleum Corp. Ltd, Mangalore Refinery and Petrochemicals Ltd, Indian Oil Corp. Ltd, Reli- ance Industries Ltd and Essar Oil Ltd. Cairn has already made an investment of $4 billion in the Rajasthan field with an addition- al $2 billion to be invested over the next two years. “We are fully funded for the next phase,“ Dhir said.

Source:Livemint & Bloomberg