Cairn Oil & Gas Gets 10-year Extension For Its Rajasthan Oil Block

Cairn Oil & Gas, a unit of Vedanta, on Thursday secured approval from the Ministry of Petroleum & Natural Gas (MoPNG) to extend the production sharing contract (PSC) for its Rajasthan block for ten years until May 2030.

The block, with 38 discoveries, till date, has total in place hydrocarbons of 5.9 billion barrels of oil equivalent (bboe). The block has cumulatively produced more than 700 million barrels of oil equivalent (mmboe) in the last decade. 

This contract extension will spur capex investment and encourage private players entering this critical sector, the company said in a statement.

"This extension will be a key determinant in our goal of doubling production capacities and helping India achieve energy aatmanirbharta. Home to prolific fields, the Rajasthan block demands extensive investment in technologies to enhance recovery. The field also carries potential for new explorations. For these opportunities, especially, this contract extension will be significant. The Rajasthan block is also home to our unconventional shale exploration, and we are confident that this contract will now enable us to streamline operations and enhance investment in this very prolific block," said Prachur Sah, Deputy CEO, Cairn Oil & Gas.

"We are firm in our overall vision of contributing 50% to India’s domestic crude production and we will do this by committing an investment of USD 5 bn and achieving production of 500,000 barrels of oil equivalent per day (500 kboepd)," Sah added.

The Rajasthan block is of crucial national significance and is home to a number of technology firsts. The field has been the first in the country to apply micro seismic hydrofrac monitoring technology and has also executed the world’s largest jet-pump operation. 

It is also home to the world’s largest Enhanced Oil Recovery (EOR) polymer flood project and the world’s largest Alkaline Surfactant Polymer (ASP) project. The field also marks the starting point of the Mangala pipeline – the world’s longest continuously heated and insulated pipeline that carries crude from the fields of Rajasthan to refineries in Gujarat.

These many technology-firsts have been enabled by the previous PSC and the new contract is expected to pave the way for more technological excellence as the company gears to double production and achieve full potential of the Rajasthan block, the company said.