1. Rajasthan Block RJ-ON-90/1
Cairn is currently involved in an extensive exploration and appraisal program across its 5,000 square kilometer exploration block in the Rajasthan Basin.
Three drilling rigs are currently operating across the block, a workover rig is conducting testing operations, artificial lift trial operations are ongoing and well stimulations are planned.
Exploration activity is now focusing on the deeper stratigraphic horizons (Barmer Hill and Fatehgarh) in the northern third of the block with the current N-B-1 well being 120 kilometers north of the recently drilled GR-A-1 well.
Ten of the fourteen wells drilled on the block to date have encountered hydrocarbons.
Recent Exploration Drilling in the Southern Rajasthan Basin
Exploration drilling on the Central Basin High located in the southern part of the block has met with mixed results. Wells targeting the shallow Thumbli and Dharvi Dungar plays have encountered variable reservoir quality and sand thickness. The GR-F-1 well discovered oil in the Dharvi Dungar and flowed 100 bopd of 40 degree API oil on test. The Thumbli section was log evaluated as hydrocarbon bearing and will be tested in the near future with a separate workover rig. The GR-A-1 and GR-S-1 wells each encountered residual hydrocarbons only.
The Saraswati-1 discovery well was placed on an EWT in August 2003. To date the Barmer Hill reservoir has produced 62,260 bbls (average 817 bopd) and the Fatehgarh reservoir 5,985 bbls (average 468 bopd).
A 3D seismic survey was acquired over Saraswati during 2003. Following interpretation of the 3D two appraisal/development wells are now planned to be drilled updip of Saraswati-1, the first of which is expected to spud by end February 2004.
The drill-stem test on the Raageshwari E-1 discovery well at the shallow Thumbli level flowed 200 bopd and 7.3 mmscfd. A follow-up EWT using artificial lift has just begun.
The GR-2 appraisal well 2.5 kilometers south of the E-1 discovery well increased the oil column thickness to between 90 and 120 meters. The GR-3 appraisal well 2.5 kilometers to the north of E-1 began drilling in January 2004. Further Raageshwari delineation wells are planned.
Q Shallow Appraisal Well
Log evaluation of the top hole section of the original Q-1 Barmer Hill discovery well suggested hydrocarbons in the shallow Thumbli section. A subsequent dedicated shallow appraisal well has however confirmed that the hydrocarbons were residual and consequently there is as yet no firm case for stratigraphic trapping at the Thumbli level.
Exploration in the Northern Rajasthan Basin
The medium depth drilling program in the northern third of the block is aimed at the Barmer Hill and Fatehgarh sections which are expected to be encountered at shallower depths than in the central and southern areas of the basin.
The N-B-1 exploration well, which is targeting a prospect in the extreme north of the block approximately 60 kilometers from the RJ-Q-1 discovery, was spudded on 31 December 2003. This well is currently expected to be followed by an exploration well on prospect N-A, located 10 kilometers to the south of N-B-1. The N-J-1 exploration well, located on a prospect 30 kilometers to the north west of Saraswati, was spudded on January 5, 2004.
2. Gujarat Block CB/OS-2, Cambay Basin
An exploration well is expected to spud in the first quarter 2004 6.5 kilometers from the Suvali processing plant, on the onshore eastern edge of the block. The well is to test a prospect which has the potential for shallow gas and deep oil, similar to that encountered in the nearby Lakshmi and Gauri fields.
1. Block KG-OS/6
An exploration well located in 110 meters of water depth and designed to test prospect 6 in the 'pan-handle' part of the block reached 800 meters before the well encountered shallow overpressures and had to be been abandoned for operational reasons without it reaching the planned objectives at around 2500 meters. It is not known at this stage as to whether any further drilling will be attempted on Block KG-OS/6 pending future discussions with partners and the Ministry.
2. Block KG-DWN-98/2 - ONGC Transaction
Negotiations with ONGC in respect of the transaction announced in October 2003 are progressing and it is anticipated that definitive agreements will be executed during the first quarter of 2004.
Cairn has received an invitation from the Indian Government to commence PSC negotiations for Block GV-ONN-2002/1 in the Ganga Basin which Cairn applied for on a 100% basis in the NELP-IV exploration bid round.
Cairn has also been awarded one of the three blocks onshore Gujarat for which it bid jointly with ONGC in NELP-IV. Cairn will have a 30% interest in this block and ONGC will be the operator.
The planned Sangu perforation and re-perforation campaign was successfully completed in early January 2004. Following this work the tested deliverability of the producing Sangu wells is approximately 250 mmscfd, although offtake for 2004 will remain dependent on market demand.
Bill Gammell, Chief Executive, commented 'Cairn is progressing its intensive operational campaign in Rajasthan. Although ten out of fourteen wells drilled to date have encountered hydrocarbons, a significant amount of additional drilling and evaluation work still needs to be undertaken to properly evaluate this 5,000 square kilometer area. A further update on the progress of this campaign will be given at the time of the annual results in March.
Following the acquisition of Shell's interests in Bangladesh and against a backdrop of increasing domestic demand for gas, a successful workover program has been completed at Sangu. This has demonstrated the field's capacity to deliver 250 mmscfd from the existing wells.
I am delighted with the continuing strong performance from our producing assets in South Asia and we will benefit from the increased interest in Sangu.'
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