Cairn India's Barmer block lives up to expectations

It is official, Cairn India's Barmer Block in Rajasthan has become the second Indian oil block to produce more than 200,000 barrels a day.

The company's board presenting its annual results for 2013/14, confirmed that in March 2014, the block produced this quantity of crude oil. Only the ONGC-operated Mumbai High has a better production rate, of 280,000 barrels a day after peaking production of 400,000 barrels.

Cairn India has a 70 per cent stake in this Barmer Block, while national oil company ONGC holds the rest. Cairn is focusing heavily on this block, and aims to cross Mumbai High production in next three years.

Elango P., CEO, Cairn India said, "Going forward, we continue to remain focused on executing multiple projects especially in the Barmer Basin, by deploying talent and technology to achieve world class recovery and discovery rates."

The company spokesperson briefing reporters after the board meeting said that in last financial year, out of 17 wells drilled, the company found hydrocarbons in 14. In the process they have opened up five new plays in the block and discovered reservoir worth 50 million barrels of oil equivalents. Cairn resumed exploration work in 2013, after getting much awaited clearances from petroleum ministry, and the spokesperson said that they added six discoveries (one in April 2014 at Kaameshwari West-8, which is very promising and flowed oil at 117 barrels per day).

In this financial year, the company also spent more on the exploratory activities, $0.9 billion. Majority of it went to Barmer.
"In Rajasthan, by combining a world-class asset with our proven technical expertise and disciplined approach to execution, we achieved a landmark cumulative oil production of 200 million barrels and a 200,000 boepd production milestone in March 2014.
We have also significantly added to our resource base by delivering a rapid exploration and appraisal drilling program with a success ratio of  50%, establishing 6 discoveries and adding over 1 billion barrels  of oil and gas in-place," Elango said.

The low operational cost at this block is also helping the company swell their revenues. The results suggested that the operational cost during the last fiscal from this block remained US$ 3.9 per barrel. Cairn India closed its books with revenue of $3.1 billion which is up by 7% year on year, with EBITDA of $2.3 billion. This is more than 50% of their parent group Vedanta Resources's EBITDA figures. This year, Cairn India presented $3.8 billion cash in their books. The spokesperson said, the company generated cash flow worth $1.8 billion from operations in the current fiscal.