LATEST NEWS Dated 15.06.2010
FROM CAIRN INDIA
Mangala sales commence through pipeline
Cairn India and ONGC, the 70:30 joint venture (JV) partners in the Rajasthan block, RJ-ON-90/1, have commenced sales through the world’s longest continuously heated and insulated crude oil pipeline.
The ~590 km long Barmer to Salaya section of the Barmer to Bhogat pipeline (~670 km) is now operational with oil supplies having commenced to the private refineries from the delivery point at Salaya.
Sale of crude to IOC through the pipeline is also expected to commence soon. Production is currently ~60,000 barrels of oil per day (bopd).
The completion of the pipeline and related infrastructure allows the JV to sell crude to the refineries in order to gradually increase both production and sales. Pipeline sales are expected to reach 125,000 bopd in the second half of calendar year 2010 and sales arrangements with four buyers are now being put in place for 143,000 bopd.
The pipeline has been constructed and installed in accordance with notified regulations and international best practices. The installation and Right of Usage (RoU) reinstatement has been subject to regular review by the International Finance Corporation independent auditors.
Construction work is now set to commence on the Salaya to Bhogat section of the pipeline, on the Gujarat coast with completion targeted for 2011. The pipeline, which is part of the Mangala Field Development Plan, has been approved by the Government of India.
Sudhir Vasudeva, Director (Offshore), ONGC said:
“Commissioning of this crude oil pipeline marks a successful completion of a technological marvel by our Joint Venture team in the Rajasthan project and would facilitate more cost-effective and augmented crude oil production directly accessing the buyers. In partnership with all stake holders, we are committed to develop the resources in the Barmer basin and provide our nation with additional volumes of crude oil.”
ABOUT CAIRN
Cairn India holds material exploration and production positions in nine blocks in India and one in Sri Lanka. In addition two blocks in the NELP VIII round has provisionally been awarded.
The focus on India has resulted in a significant number of oil and gas discoveries. In particular, Cairn made a major oil discovery (Mangala) in Rajasthan in the north west of India at the beginning of 2004. Twenty five discoveries have been made in Rajasthan block RJON-90/1.
In Rajasthan, Cairn India operates Block RJ-ON-90/1 under a Production Sharing Contract (PSC) signed on 15 May 1995. The main Development Area (1,858 km2), which includes Mangala, Aishwariya, Saraswati and Raageshwari is shared between Cairn India and ONGC, with Cairn India holding 70% and ONGC having exercised their back in right for 30%.
A further Development Area (430 km2), including the Bhagyam and Shakti fields, is also shared between Cairn India and ONGC in the same proportion.
The Operating Committee for Block RJ-ON-90/1 consists of Cairn India and ONGC.
India currently imports more than 2.4 million barrels of oil per day (bopd). The domestic production is approximately 0.7 million barrels of oil per day of which approximately 69,000 bopd comes from the Cairn India operated assets (Ravva, CB-OS/2 and the Rajasthan block)
COMMENTS : By all accounts, CAIRN appears to be a good success story in implementation of its projects. In next 2 years, it might easily equal ONGC in stature. Its stock too may follow suit.
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