Cairn Energy has received formal approval from the Government of India for a Declaration of Commerciality in respect of the Mangala, N-A, Saraswati and Raageshwari discoveries. The approval secures Cairn an extensive Development Area, inclusive of all development, appraisal and exploration rights, across 1,858 square kilometers of the Thar desert in Rajasthan. This Development Area also incorporates the unappraised GR-F, Kameshwari and N-R discoveries.
The Development Area, which is the equivalent size of approximately 12 North Sea blocks, is now retained until 2020 with the contractual right for extension(s) beyond that date subject to mutual agreement with the Government of India.
Work is underway on how best to develop the fields, through the Front End Engineering Design (FEED). This work is also looking at the various ways of delivering the crude to the buyers. Decisions on the preferred options are likely to be made in the early part of 2005.
At the same time preliminary work on a Field Development Plan (FDP) for Mangala and N-A has started. Cairn plans to submit the FDP to the Government in the first half of 2005.
Bill Gammell, Chief Executive of Cairn said:
"We are delighted to have secured this extensive Development Area which includes not only the Mangala and N-A fields but also other unappraised discoveries and exploration prospects. We remain fully focused on progressing the Mangala and N-A development whilst at the same time continuing our extensive exploration and appraisal campaign. An operational update on the progress of the exploration and appraisal drilling program will be given in December."
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