Cairn India gets green nod to hike oil, gas output at Rajasthan block

Cairn India has received clearance from the ministry of environment and forests to raise crude oil production at its prolific Rajasthan block by 50 per cent to 300,000 barrels per day.

The ministry also approved the company's proposal to produce up to 165 million standard cubic feet per day of natural gas from the Barmer basin block.

The environmental clearance will allow the company to proceed with its plans to invest $3 billion to ramp up capacity at the Barmer field, carry out oil-recovery programmes at the ageing Mangala field nearby and double its natural gas output from Rajasthan.

According to Cairn India, its gas reserves in Barmer could be as high as 3 trillion cubic feet, which is almost equal to Reliance Industries' reserves in the Krishna-Godavari basin in the east coast of India.

Gas production is planned to reach 22 million standard cubic feet per day (mmscfd) by end of the fiscal and the new investment in the field development would take it to 90 mmscfd by end of FY16, says Cairn India.

So far, the company had been producing just above 200,000 bpd of crude and has been seeking the government's nod to extend the contract period by at least 10 years so as to increase output further.

"The ministry of environment and forests has examined your application. It is noted that the proposal is for augmentation of hydrocarbon production (from 200,000 bpd to 300,000 bpd) and 165 mmscfd natural gas in RJ-ON-90/1 block, Barmer and Jalore districts, Rajasthan.

"The ministry of environment and forests hereby accords environmental clearance to the above project under the provisions of EIA notification," the order said.

According to the ministry, Rajasthan block has hydrocarbon resource potential of an estimated 7.3 billion barrels of oil equivalent and the project is estimated to cost Rs16,000 crore.

Cairn proposes to develop 205 well pads for additional production/injection/EOR wells and evacuation infrastructure.

"Land requirement for terminal expansion will be 344 hectare," the order said.

The proposal was considered by the Expert Appraisal Committee in May last year and again on 29-30 January and 28-30 April this year. "Based on the documents furnished and presentation made by the project proponent and the EIA consultant, namely AECOM India Pvt Ltd, the committee recommended the proposal for environmental clearance," it said.

Cairn India will have to comply with prescribed norms on stack emission and leak detection and repair programmes, undertake waste water treatment and develop a green belt in at least 33 per cent of the plant area to mitigate the effects of fugitive emissions.

Cairn will also have to set aside Rs300 crore for the Enterprise Social Commitment based on local needs.

Cairn India's Rajasthan block produced 181,894 barrels per day of crude oil in April-June and 8 million standard cubic feet per day of gas during the period.

State-run Oil and Natural Gas Corp (ONGC) holds 30 per cent stake in the Rajasthan block where Cairn is the operator with 70 per cent stake.