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Thar desert emerging as the next energy hub
The Thar desert in its underbelly contains millions of tonnes of oil and natural gas and in a few years from now, the desert region is expected to witness a boom with a lot of economic activities taking
place. Thar desert in western Rajasthan is emerging as the next energy hub of country. The region has rich deposits of oil, gas, lignite coal, coal bed methane and to top it all, solar and wind
energy. Many companies are in queue for establishing their energy projects in the region and after lignite-based power projects and
wind energy, a number of solar power units would dot the desert landscape.
the successful growth of the Indian economy is largely dependent on a stable supply of hydrocarbons and the state has taken a lead in this direction. The journey towards change started when Cairn Energy PLC discovered the Mangala oilfield in Rajasthan in
January 2004. It was the biggest oil find in India since 1985.
Cairn India can produce up to 2,40,000 barrels per day
Cairn India can produce up to 2,40,000 barrels per day from its prolific Rajasthan fields, equivalent to output from the nation's largest oilfield of Mumbai High, the company has informed the
government in March 2010. Cairn India CEO Rahul Dhir last week wrote to the Petroleum Ministry and the sector regulator DGH informing that it can produce 37 per cent more oil from the Thar dessert fields than previously thought.
"Based on our review, we estimate that the potential resource in the
(Rajasthan) block is now estimated to be 6.5 billion barrels of oil equivalent in place. This resource base provides a basis for a vision to produce 2,40,000 barrels of oil per day, subject
to necessary approvals and additional investments," he wrote in identical letters to Petroleum Minister Murli Deora, Oil Secretary S Sundareshan and DGH Director General S K Srivastava.
ONGC and CAIRN ENERGY
ONGC had started exploration for oil and gas in western Rajasthan in 1954 and Oil India Limited in 1983.
Cairn Energy of UK had in January 2004, announced the discovery of 450 to 1,100 million barrels of good quality light crude oil at the well, N-B-1, in block RJ-ON-90/1 in northern Rajasthan. Earlier this year, ONGC had acquired Cairn Energy's stake in two fields in the Gulf of Cambay in a swap deal.
The Cairn Energy has till date has made 18 discoveries - Guda, Raageshwari gas, Raageshwari oil, Kameshwari oil, Saraswati oil, GS-V-1, N-R-4, Vandana, Vijaya, N-E-1, Aishwariya, Mangala, Bhagyam South-I, NC West Oil and gas, N-I, Shakti and Bhagyam.
Cairn Energy has made its 18th oil discovery in Rajasthan, where it claims to have found 3.5 billion barrels of oil reserves. "Today
(25th April 2006) we can announce a further discovery in Rajasthan which is the 18th on the block. The N-P exploratory well in Barmer has encountered 16 metres of oil bearing
Fatehgarh sands," Mr Norman Murray, Chairman of the company said. Cairn estimated that three main northern fields - Mangala, Bhagyam and Aishwariya - had risen to 800 million barrels of oil. "We now believe that there is in excess of 3.5 billion barrels of oil in place within our acreage and the resource base continues to grow," he said.
The Ministry of Petroleum and Natural Gas, Government of India, highlights of the discovery as following:
-- Discovered by Cairn Energy, UK. Other consortium partner ONGC.
-- Country's largest inland oil discovery in last two decades due to sustained exploration effort of seven years.
-- Block covers an area of approximately 5,000 sq km.
-- State-of-the-art technology with innovative geological modeling used in exploration.
-- Initial estimates for the oil in place of this discovery range from 63 mm
tons to 153 mm tons. Preliminary reserve estimates are in the range of 7 mm tons to 28 mm tons.
-- Two important discoveries last year viz Saraswati and Rageshwari, with a total of 35 mm tons of in-place reserves.
-- Great potential to transform rural economy of Barmer district.
"Cairn is very positive about the Barmer region and we are preparing to start production and to achieve the target of 1,75,000 bopd from the area," he added. The project will create over Rs 5,500 crore of
earning through annual royalty to the Rajasthan government (Rs 15 crore per day). In addition, the state government would also be paid royalty for the usage of the pipeline amounting to Rs 4 crore per day. It will also create considerable earning for the Union government that has 50% profit share in the project.
Oil Refinery
Domestic oil majors are in the race to set up a well-head refinery at Cairn Energy's RJ-ON-09/1 block in
Rajasthan. Under the production sharing contract (PSC), the government has to purchase crude oil from the date of first commercial production, which has been indicated as mid 2007. ONGC holds 30% equity in this block with Cairn Energy as the operator. Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation Ltd
(HPCL) are all in the race to set up a 4-6 million tonne refinery estimated to cost between Rs
4,000 - 5,000 crore. The life span of the Rajasthan oil block is estimated to be around 23 years and the production which will commence from mid 2007 will peak in the beginning of 2008 at around
80,000 - 100,000 barrels of oil per day. ONGC is keen on setting up a 6 mtpa well-head refinery for
processing this crude oil. As the refinery will take anywhere between 4-5 years, ONGC has
proposed buying the crude and evacuating it through a pipeline to the nearest coast
(Mundra or Kandla) and shipping to its refinery in Mangalore for processing.
Natural Gas
High quality natural gas was discovered in Rajasthan at
various places at Jaisalmer, Barmer and recently in Ganganagar. In Rajasthan, over 2,900 million cubic meter gas reserves have been found by ONGC, and 9,200 million cubic metre reserves by Oil India so far.
On May 26, 2006 it was announced a discovery of large, high quality
reserves of natural gas at Shahgarh sub-basin of Jaisalmer district in
Rajasthan. Gas was discovered in Focus Energy's exploration block, around 25 km from the Pakistan border, in the same stratigraphic area as the one producing multi-trillion cubic feet fields of Sawan and
Miano. Focus Energy, formerly known as Phoenix Overseas, struck gas in its onshore blocks RJ-ON/6 in well SGL-l, the company announced
it. Official sources, however, estimated that the gas find is large and around six trillion cubic feet.
In Jaipur, Rajasthan's Minister of Mines and Petroleum Laxmi Narayan Dave said it was the first time that such huge reserves of natural gas were found in the state. "We are emboldened by the discovery of the huge and high quality gas reserves in Jaisalmer area," he said. The minister also said that the flow rate of gas had been tested with 900 PSI (pressure square inch) for about an hour and there was no drop in the
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