Cairn India signs up with US firm to invest Rs 1,200 cr in Rajasthan block

Mumbai: Cairn India has signed up Halliburton Company, a US multinational, for a Rs 1,200-crore contract to drill 100 wells at the Rajasthan onland block RJ-ON-90/1 over the next 18 months.

This will be Halliburton's first drilling contract in India. Halliburton is one of the world's largest oil field services companies with operations in more than 80 countries.

"Cairn expects Halliburton to begin drilling in a month or two," said a senior official from an oil field services firm.

After protracted delays, Cairn India won approval to drill exploration wells in the block last year. In FY14, it brought on production a total of 129 wells. Oil and Natural Gas Corporation (ONGC) is Cairn India's 30 per cent joint venture partner in the Rajasthan block. Cairn and ONGC plan to drill 300 wells over the next three years, and 1,000 wells in five years.

Cairn plans to up production from the current level of 200,000 barrels a day to 500,000 barrels a day in five years. The oil and gas fields in Rajasthan constitute Cairn India's key assets. The Mangala field - the largest onshore oil discovery in India in the previous two decades - was discovered in January 2004. This was followed by Bhagyam and Aishwariya. To date, 31 discoveries have been made in the Rajasthan block.

Also, after three years of waiting and nearly relinquishing the block, Cairn India with its partners Tata Petrodyne and ONGC have decided to begin drilling shortly in PR-OSN-2004/1 block in Palar basin on the east coast in the Bay of Bengal.

According to consortium partners, the Department of Space recently cleared the block, which was awaiting clearance for long. "This is a positive move. We were disappointed and in good mind to relinquish the block as nothing was happening on it for the past three years. Now we would drill three wells," said a senior executive with ONGC. The consortium partners would invest Rs 600 crore in drilling the three wells. The block is said to hold recoverable reserves of about 30 million barrels of recoverable oil.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.