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Vedanta’s Cairn Oil and Gas to ramp up oil, gas production to 260-270 kboepd by FY20
Mining giant Vedanta’s upstream arm, Cairn Oil and Gas, expects to ramp up its crude oil and natural gas production to an average of 260-270 thousand barrels of oil equivalent per day (kboepd) by the end of financial year 2019-20 (FY20) from its current production of 180 kboepd, the company informed as part of its investor presentation.
According to Srinivasan Venkatakrishnan, group chief executive officer (CEO), Vedanta, the company has increased its production guidance for FY20, as compared to its earlier projection of 200-220 kboepd.
The increase in production will primarily take place on account of, “Wells drilled across the projects will be 250 of which 185 will be hooked up for production. Secondly, our processing capacity for both oil and gas shall increase substantially by year-end. The facility up-gradation project at MPT will be completed by year end increasing our liquid handling capacity to 1.3 million barrels of liquid per day. In tight gas RDG the early production facility commissioned earlier is being ramped up to 15,000 barrels in addition the completion of the gas terminal by end of the fiscal year shall add another 15,000 barrels,” Venkatakrishnan told analysts.
Venkatakrishnan added that 70 percent of the increase in oil and gas production is expected to come from Rajasthan assets alone.
The company has commenced an investment of $3.2 billion to monetize 400 million barrels and has deployed 10 development rigs at site currently. The work program for the fiscal year includes drilling over 500 wells, of which the company has already drilled 139 wells and hooked up around 46 wells.
The upstream arm of Vedanta expects to increase its gas processing capacity to 240 million standard cubic feet per day (mmscfd) by the end of FY20, from 84 mmscfd currently. The company’s oil and gas projects are generating an Internal Rate of Return of more than 20 percent at an oil price of $40 per barrel.
In order to increase production from all of its assets the company has tied-up with multiple oilfield service companies, including Halliburton, Baker and Hughes GE (BHGE), Schlumberger, Petrofac, Megha Engineering, and Larson and Turbo.
The company has appointed Lloyd’s Register for integrated project management for the 41 blocks won under the first round of Open Acreage Licensing Programme and expects to award end-to-end project contracts for the blocks by mid-August.
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