State-run Oil and Natural Gas Corp (ONGC) and the oil ministry's technical arm, the Directorate General of Hydrocarbons (DGH), have given Cairn India the go-ahead to start production from the Bhagyam oilfield, the second-largest find in the prolific Rajasthan block.
Cairn, which was recently taken over by London-based mining group Vedanta, will maintain oil production from Bhagyam at the level of 20,000-25,000 barrels per day from next month and reach the approved peak output of 40,000 bpd by April, sources said.
ONGC, which holds 30 per cent in the Rajasthan block, had asked for third party certification to ascertain if Cairn's production plan would prudently exploit the reserves and if the surface facilities were capable of handling oil and water from the field. According to sources, the certification, came in a few days ago, after which ONGC gave its go-ahead for commencement of production.
Prior to this, the DGH had approved the production plan, they said, adding that the FY12 production rate, work programme and budget for the Bhagyam field would now be put up to the block oversight committee for approval.
The management committee approval of the same is expected in 7-10 days, after which Cairn would looking at beginning output from Bhagyam. Currently, Mangala, the biggest of the 18 oil discoveries in the Thar desert block, is producing 125,000 bpd, but it can produce 150,000 bpd within a few days from MC approval.