Cairn sees 2 bn barrels of oil in Rajasthan

The UK-based Cairn Energy has estimated the total in-place oil across its various fields in Rajasthan basin in excess of two billion barrels.

The company, whose fortunes changed with series of oil discoveries in Rajasthan, expects to produce 100,000 barrels of oil per day (bopd) from its recent discoveries "" Mangala field and N-A field "" by the end of 2007.

These two fields are set to form the core of future development for the company.

While the appraisal of the Mangala field was completed and final appraisal well on N-A field is been tested, "Mangala and N-A field are planned to come on stream at between 60,000 and 100,000 bopd towards the end of 2007," as per the interim results announced by Cairn Energy on Tuesday.

The company expects to submit the final field development plan (FDP) for Mangala field to the government during the first half of 2005. Cairn plans to develop the N-A field in combination with Mangala.

Cairn Energy reported a 42 per cent drop in profits during the first half ended June 30, 2004 at 15.2 million pounds compared with 26.2 million pounds in the same half of 2003.

Norman Murray, chairman of Cairn Energy in his statement, said: "The company has been actively reviewing and re-shaping its business to ensure that the Rajasthan project is appropriately resourced to meet the challenges arising from the intensive forward programme."

Bill Gammell, chief executive, Cairn Energy, said: "During 2004 Cairn's fortunes and prospects have been transformed through major exploration success in Rajasthan. An extremely active exploration, appraisal and development campaign is continuing with the potential to add further significant value. Cairns track record of successful exploration and project delivery in south asia leaves it ideally placed to meet the challenges offered by the Rajasthan developments".

Till date the company has drilled 40 wells in Rajasthan basin comprising 22 exploration wells and 18 appraisal wells, which have led to 10 discoveries.

DeGolyer and MacNaughton, international reservior certifier, has put in place reserves at the Mangala oil field at one billion barrels and recoverable reserves in the range of 100 to 320 million barrels. Cairn Energy discovered the Mangala field with the N-B-1 exploration well in January 2004.

"Following successful completion of the appraisal drilling programme in July 2004, Cairn currently estimates that oil in-place volumes for the fatehgarh reservoir range from 770 to 1,150 million barrels, with a recoverable reserve estimate in the 120 to 335 million barrel range."

The N-B-1 well was drilled in the Fatehgarh reservoir. The company has pointed out that the "additional in-place volumes of oil are contained in the silt stones of the Barmer Hill formation, the current mean oil in-place estimate for which is around 500 million barrels."

In March 2004, the company discovered second field N-A field. "Initial estimates of oil in-place for the N-A field at the time of the discovery ranged from 130 to 470 million barrels, with preliminary recoverable reserves estimated to be in the 20 to 80 million barrels range".