Petrol Stop - Cairn India strikes oil, gas in K-G basin

Cairn India strikes oil, gas in K-G basin

Tuesday, 24 August 2010

24 August 2010;business-standard.com: New Delhi: Cairn India Ltd has struck oil and gas in an onshore block in the Krishna-Godavari basin, in Andhra Pradesh. The discovery of oil and gas in the Nagayalanka-1z well in block KG-ONN-2003/1 has been notified to upstream regulator Director General of Hydrocarbons, the company said in a communication to the Bombay Stock Exchange. The above block was awarded under the fifth round of New Exploration Licensing Policy. Cairn Energy India Pty Ltd (CEIPL), a wholly-owned subsidiary of Cairn India, is the operator of the block with a 49 per cent participating interest while ONGC holds the remaining 51per cent. The company employed two drilling rigs in the block and discovered both oil and gas in the third well it drilled. “A flow of 75 barrels per day of oil and 0.27 million cubic feet per day of gas was achieved,” the company said. The results of the test are being evaluated by the company to assess the commercial potential and determine the future appraisal programme. The company’s share price at the Bombay Stock Exchange closed flat at Rs 343.35. The announcement comes exactly a week after Cairn Energy, Cairn India’s parent company, announced sale of 51-60 per cent stake in Cairn India for $8.5 billion-$9.6 billion to Anil Agarwal-promoted Vedanta Resources. While experts see this as an expensive deal, Vedanta could gain from this and more such future discoveries by Cairn India. Cairn India is the operator of the Barmer block in Rajasthan with a 70 per cent participating interest and its joint venture (JV) partner ONGC has a 30 per cent participating interest. Average crude oil production from Barmer block is 120,000 barrels per day. Cairn India is also the operator of Ravva oil and gas field and Cambay Basin (CB/OS-2) which produces 37,043 and 13,527 barrels of oil equivalent per day.