Securing Energy, Fueling Growth

40 Pages·2014·2.63 MB·English

Securing Energy,
Fueling Growth
Enhancing India’s
hydrocarbon footprint
Supplement to:
®

Contents
2 Building a world-class E&P company
in India —in the words of the CEO
4 The path to success
8 Building energy security
12 Mangala: From sand to oil
14 Black gold flows across the desert
16 Pioneering initiatives in
technology application
18 Enhanced oil recovery (EOR) in Rajasthan
20 Alkaline-surfactant-polymer
(ASP) flooding
22 Recognized excellence in HSE
24 An oil company that also
explored for water
26 The Barmer Basin development
29 Delving deeper in Rajasthan
30 Exploring beyond India’s borders
32 Growing through the drill bit
34 An attractive proposition for the
world’s community of vendors
COMMISSIONED BY: VP, Custom Publishing Copy Editor
Cairn India Limited Roy Markum Ron Bitto
3rd & 4th Floors, [email protected] [email protected] PennWell Corporate
Headquarters
Vipul Plaza, Sun City Editor in Chief Art Director
1421 S. Sheridan Rd.,
Sector 54, Gurgaon Denise Allen Zwicker Meg Fuschetti
Tulsa, OK 74112
122 002, India [email protected]
Production Manager
Co-Editors Shirley Gamboa
Vendor Management Team,
Circulation Manager
Cairn India
Tommie Grigg
2 cairn india limited
Building a world-class E&P company in India
—in the words of the CEO
When we entered India in 1994 our goal was to create a severance and patience. We drilled 13
dry wells before the 14th revealed a bil-
world-class operation. The majors had looked at Asia
lion-barrel oil field worth US$100 billion
in general, but they left India out. On the other hand,
at today’s prices. The discovery aside,
we believed that India had a lot to offer in oil and gas. putting it into production required us to
bring a great deal of innovative technol-
ogy to India. For example, in just two
We began with a single field producing ap- we produce outstanding results. Here are
years, we built the world’s longest con-
proximately 3,000 barrels per day. Today, a just three examples:
tinuously heated pipeline, a first for any
couple of decades later, we are producing ◆ Our first offshore field, Ravva, was essen-
oil independent, and it has not been re-
close to 220,000 barrels per day—almost tially a redevelopment project. Everyone
peated since.
30 percent of India’s domestic crude oil else assumed that it would produce no
production. When we reach our goal of more than 100 million barrels of oil. But, We couldn’t have achieved these mile-
300,000 barrels per day, our contribution under Cairn’s care, it already has pro- stones without our suppliers, who brought
to India’s energy security will be even more duced more than 250 million barrels— us the technology we needed. The role of
significant. and at one of the lowest operating costs the entire vendor and supplier community
It’s been a fascinating journey thus far, and in the world. has been enormous for Cairn. They are our
partners.
there’s so much still ahead of us. ◆ At Cambay, on the west coast of India,
we found and developed a greenfield Now we have reached a certain level of
Cairn has built its success on
project in just 28 months. It’s the fast- success and laid a solid foundation for
a steadfast commitment
est discovery-to-delivery project an even more exciting future. We have
to learning. We do, we
ever achieved in India. world-class assets in our portfolio. We
learn, we adapt and
◆ Our record-breaking success have built a world-class talent pool. We
at Rajasthan was due to per- have the funds to deploy—US$3 billion
over the next three years—to begin the
next phase of Cairn India’s growth. We
are looking for the execution partners to
achieve our very ambitious goal of creat-
ing energy security for India.
In this next phase of growth we are scouting
worldwide for the technology that will con-
tinue to improve our recovery factor.
Our business objective is to be able to op-
erate our fields within a wide crude oil
price range. The route to that objective is
greater productivity. We are focused on
discovery and recovery technology and
cost efficiency.
P. Elango, CEO
cairn india ltd.
Typically, the big fields—the elephants—
come first. Then come the smaller finds.
We see opportunity in tight reservoirs and
PRODuCInG ASSETS
small pools and we need the latest tech-
nology to unlock this potential. Rajasthan (RJ-On-90/1)
We will be drilling at least 450 wells by fis- ◆ Key fields in rajasthan: mangala, Bhagyam and aishwariya.
cal year 2016, including 100 exploration ◆ development area (da) 1 comprises the mangala, aishwariya,
and appraisal wells, onshore and offshore. Saraswati and raageshwari oil and gas fields, and produces ap-
And we’re developing facilities to bring this proximately 161,000 boepd; da 2 comprises the Bhagyam field and
new oil and gas into production quickly. For produces approximately 25,000 boepd.
that, we need cross-sector technology: part-
◆ Block current production: approximately 186,000 boepd.
ners who have achieved these goals time
◆ raageshwari: commenced production in march 2012.
and again around the world.
◆ Saraswati: began production in may 2011.
Approximately 78 percent of India’s basins
◆ Bhagyam: started production in January 2012.
are still under explored. Cairn is engaged in
constant dialogue with the government to ◆ Over the next three years cairn plans to spend US$3 billion.
open these opportunities, including shale gas.
Ravva (PKGM-1), Andhra Pradesh
The policy environment in India has improved
◆ Block current production: approximately 28,000 boepd.
significantly in recent years—and even in the
past few months. The government of India ◆ Produced more than double the initial estimates of crude oil and
has defined a clear vision to achieve energy natural gas.
self-sufficiency by 2030, so the opportunity ◆ example of how technology can play a central role in accessing
for us is very large. new reserves.
Cairn wants to lead the way in building re- ◆ toward the end of 2013, commenced drilling of “high value, high risk”
lationships with the best providers of tech- exploration prospect in High Pressure High temperature (HPHt)
nology—both service and equipment. As environment.
we demonstrate greater efficiency through
Cambay (CB/OS-2), Gujarat
technology, our partners will find multiple
opportunities—not only with Cairn, but also ◆ Block current production: approximately 10,300 boepd.
with all the companies in India. ◆ example of optimal asset use.
We are ready to deploy the best technol- ◆ tolling and processing of Oil & natural Gas corp. ltd.’s north
ogy the world can offer. We have the re- tapti gas.
source base. We have the money to invest. ◆ application of advanced geophysical tools transformed the block
We have people who understand the tech- from a predominantly gas field to an oil field.
nology. Now we just need solution provid-
◆ advanced reservoir modeling studies resulted in incremental re-
ers to help us achieve our vision.
coverable volumes from the reservoir zones.
◆ infill drilling campaign commenced in fiscal year 2013.
4 cairn india limited
The path to success
As Cairn approaches its 20th birthday, we take this
opportunity to look back with a bit of nostalgia at its early days.
Operating oil and gas companies en- Industries Limited, another private player in
tered the Indian exploration and produc- India, announced a mega-discovery also in
tion arena in the early 1950s. By the be- deepwater in the Krishna-Godavari basin.
ginning of the 1990s, a few thousand wells In 2004, Cairn discovered Mangala, the
had been drilled by oil majors in Asia, but largest onshore discovery of hydrocarbons
India did not figure prominently in that in India in two decades. These discoveries
RAVVA FACTS
total. However, efforts by India’s National in a short span of time attracted a number
Oil Companies (NOCs)—Oil and Natural of large and small foreign oil companies. ◆ Block current produc-
Gas Corporation Limited (ONGC) and Oil tion: approximately 28,000
Today the Government of India conducts
India Limited (OIL)—resulted in some im- boepd.
road shows promoting its New Exploration
portant discoveries. ONGC discovered the ◆ cumulative production is
Licensing Policy (NELP) offering a num-
Bombay High Offshore field during the ear- more than double its initial
ber of its oil and gas fields for develop-
ly 1970s, which continues to be the largest estimates.
ment by both Indian and foreign operating
oil field in India today.
oil and gas companies. Over the last two ◆ example of how technol-
When India opened up its economy to at- decades, the government has progressive- ogy can play a central
tract foreign investments in the early ly made investment in the Indian hydrocar- role in accessing new re-
1990s, the oil and gas industry also start- bon industry more attractive, leading to en- serves.
ed looking up. The Ravva oil field discov- hanced presence of global players. British ◆ ravva’s field-direct op-
ered by ONGC in 1987, was offered for Petroleum and British Gas currently part- erating cost is one of
re-development to Command Petroleum, ner with Reliance in its upstream opera- the lowest among cairn
a small Australian independent, and the tions. The goal is to secure energy for India india’s peers.
Production Sharing Contract (PSC) was and make it less dependent on crude im-
signed in 1994. Cairn Energy Plc, an in- ports for its rapidly growing economy. The
dependent Scottish oil and gas explora- Indian Government recently started allow-
(Command Petroleum) to India in 1994.
tion and production company, headquar- ing exploration in developed fields, there-
Ravva means “diamond” in Sanskrit and
tered in Edinburgh, took over Command by paving the way for early monetization of
Telugu and identifies the shape of this
Petroleum. Cairn successfully redevel- discoveries.
amazingly productive field.
oped the Ravva field to produce 50,000
bopd, and had its first deepwater gas At Cairn, Ravva In 1994, the JV comprising Command
find in the Krishna-Godavari basin (KG- changes everything Petroleum, later acquired by Cairn Energy
DW1) off southern India. The compa- The Ravva field was the game changer. Plc, Videocon Petroleum, ONGC, and Ravva
ny followed up with gas discoveries in the Oil (Singapore) was formed to develop the
Situated off the east coast of India, Ravva
Cambay basin in north-west India in early Ravva field.
is the cash cow that attracted Cairn
2000. Following Cairn’s success, Reliance
CAIRn InDIA lIMITED
◆ cairn energy Plc acquired controlling stake in command
Petroleum ltd. in 1996.
◆ the acquisition was completed and name changed from
command Petroleum to cairn energy india Pty. ltd. in 1997.
◆ cairn successfully concluded an initial public offering of its
indian business in January 2007. it held the majority shares
in cairn india ltd.
◆ august 2010 saw the announcement of a sharehold-
er-level transaction between cairn energy and Vedanta
resources Plc.
◆ the Vedanta Group acquired a controlling interest in cairn
india in december 2011.
6 cairn india limited
The initial production sharing contract
(PSC—called a production-sharing agree- CAMBAy FACTS
ment in other countries) estimated that the
◆ Block current production:
field would produce 100 million barrels
approximately 10,300 boepd.
of oil. Cairn, through efficient reservoir
management and use of technology, has ◆ cairn transformed the
produced more than 250 million barrels block from a predominantly
to date. The PSC committed to 35,000 gas field to an oil field.
bopd, but the joint venture maintained pro- ◆ cairn’s technology-driven
duction at 50,000 bopd for almost 9 years. approach has almost dou-
With a continuing focus on technology, the bled production.
joint venture has kept Ravva’s costs among
the lowest in the world.
Cairn is currently drilling a technically chal-
lenging, high-pressure, high-temperature covery of the Lakshmi field in 2000 and oil producer, setting a field record of more
well that is more than 4 kilometers deep the production of first gas. In the next 16 than 10,500 bopd in 2009.
and targets late Oligocene prospects. Cairn months the nearby Gauri field was also
The joint-venture partners own an 82-acre
is expecting positive results soon. brought online.
onshore processing facility at Suvali in the
The joint venture, led by Cairn, initiated district of Surat, Gujarat, long known as
Gulf of Cambay
new studies of the reservoir and discov- India’s chemical hub. The plant is certified
Cairn’s second foray in India was in the ered an oil leg. Using advanced geophys- to ISO 14001 and OHSAS 18001 stan-
turbulent waters of the Gulf of Cambay, ical tools, they successfully converted the dards and has the capacity to process 150
on India’s west coast, at CB/OS-2 block. predominantly gas field into a profitable mmscfd of natural gas and 10,000 bopd
Just 28 months passed from the dis- of crude oil.
Cairn India timeline
JAnuARy JAnuARy JunE AuGuST
1998 2000 2004 2007 2008 2009
ravva cambay mangala cairn india cairn awarded commenced
satellite gas discoveries— (rajasthan, limited listed an exploration production
discoveries. lakshmi, Gauri, india) discovery, on the Bombay license from from the
ambe. considered to Stock exchange the Sri lanka mangala field
be the largest and the national government. in rajasthan,
onshore oil Stock exchange india.
discovery in india of india.
in more than two
decades.
cairn india limited 7
Cairn India timeline
JunE OCTOBER APRIl JunE AuGuST DECEMBER
2010 2011 2012 2012 2012 2013
World’s longest discovery in made one of the ravva field Signed a farm- rajasthan
(approximately Sri lanka; first largest onshore produced more in agreement Block exceeds
600 km) in 30 years. oil discoveries in than 249 million with PetroSa 200 mmboe
continuously established the KG Basin. barrels of crude to explore in the of cumulative
heated and a working and sold 309 Orange basin, on production.
insulated pipeline petroleum billion cubic feet the west coast of
operational. system in frontier of gas—more South africa.
mannar Basin. than double the
initial estimates.
8 cairn india limited
Building energy security
Energy is a fundamental requirement for economic “With access to adequate funds, Cairn is
well positioned to finance the next phase
development. Therefore, energy security is even more
of exploration and development through in-
important in the developing world than it is in developed
ternal accruals. With planned spend of over
countries. US$3 billion by fiscal year 2016, along with
probable capital expenditure required for
developing our new discoveries, we look
India, one of the fastest-growing large several steps to promote oil and gas pro-
forward to encouraging partnership with
economies, needs energy supplies to fuel duction, including regulatory changes.”
our existing and prospective suppliers.”
its growth. As of early 2014, the republic
imports approximately 80 percent of its oil Regulatory changes Cairn’s Senior Manager of Corporate
needs. Without new and substantial do- spur development Communi cations Chirag Shah said, “We
mestic discoveries, imports are projected “Regulatory changes, such as the roll out of have been engaging more effectively with
to increase to 90 percent by 2030. This policy enabling oil exploration in Develop- the Government of India through industry
represents a significant transfer of wealth ment Areas in February 2013 and transpar- associations in India. Industry associations
from India to the oil exporting nations. ent gas pricing policy which will be effec- like the Association of Oil & Gas Operators,
“India is spending approximately $140 tive from April 2014, are likely to encourage the Confederation of Indian Industries
billion annually importing oil,” said Sunil more investments in hydrocarbon explora- and the Federation of Indian Chambers of
Bohra, Cairn’s Deputy CFO. “It has been tion and development, including develop- Commerce and Industry engage in focused
one of the biggest factors contributing to ing assets that were uneconomical earlier,” consultations with the Indian government.”
current account deficit. The Government of Bohra continued. Cairn made the largest onshore discov-
India, cognizant of the matter, has initiated ery in the world in 2004 at the world-class
“Cairn is well positioned to be the customer of choice
for oil field service companies who want to enter
India. With its proven track record, large capital expenditure
plans and willingness to adopt new technology, Cairn offers
exciting opportunities.” — T.K. Venkatesan, Director of
Procurement and Supply Chain Management