Cairn-ONGC JV starts gas sale from Rajasthan block

 The Cairn-ONGC joint venture (JV) Saturday began commercial sale of gas from its Rajasthan block.

The initial commercial volumes will be about 5 mmscf per day (equivalent to 1,000 barrels of oil per day).

The sale process was inaugurated by Minister of Petroleum and Natural Gas M. Veerappa Moily in Barmer, over 550 km from here, in the presence of Chief Minister Ashok Gehlot and Minister of State of Petroleum and Natural Gas P. Lakshmi.

The RJ-ON-90/1 block currently produces about 30 mmscf of gas per day from the Raageshwari deep gas field and as associated gas along with crude oil from the Mangala and Bhagyam fields.

This production is currently being used to meet the energy requirements at the Mangala Processing Terminal and the 600-km crude oil pipeline primarily for the purpose of heating the waxy crude produced from the block.

Following the government's decision to allow exploration, the JV has commenced drilling of the first exploration well after a gap of more than four years in the prolific Barmer basin.

The continued exploration programme in the block targets several other gas prospects that are expected to add to the production of natural gas from the block over the years. This will pave the way in future for developing the Rajasthan state as a gas-based economy.

"We are delighted to commence gas sales from Rajasthan for the first time. We have been using the gas produced from Rajasthan block for internal operations, and today we have commercialised it.

"The Rajasthan block has unexplored potential for both oil and gas and the recent government decision for further exploration enables us to explore more and produce more," said P. Elango, board member, Cairn India.

"Oil has emerged as the largest source of non-tax revenue for the government of Rajasthan. We expect gas to trigger large scale infrastructure development in future and we look forward to partner with the government of Rajasthan in this journey," said Elango.

The joint venture also commenced crude oil production from the Aishwariya field, the third largest discovery in the Rajasthan block (RJ-ON-90/1).

The field will achieve a gradual and safe ramp up to reach the currently approved field development plan rate of 10,000 barrels of oil per day (bopd).

The oil production from Aishwariya field in Barmer district was also inaugurated by Moily.

The Mangala, Bhagyam and Aishwariya (MBA) fields have gross recoverable oil reserves and resources of approximately one billion barrels. Production from the Rajasthan block currently contributes more than 23 percent of India's domestic production.

"Commencing production from Aishwarya field is another milestone in the journey to unlock the full potential of world-class Barmer basin. The production will be gradually ramped up to 10,000 bbl/day," said Elango.

"Our gross Rajasthan development investment to date is more than Rs.18,000 crore and we intend to invest over Rs.6,000 crore in exploration and development activities during financial year 2013-14," said Elango.