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Cairn India restarts exploration campaign in KG onshore block

29 Nov 2011 Evaluate

Cairn India and its partner ONGC have restarted exploration activity in the discovered Krishna Godavari basin onshore block. Cairn had discovered oil and gas in its East Coast block in August 2010. The initial discovery in one well had shown a flow of 75 barrels a day of oil and 0.27 million cubic feet a day of gas. It is light crude oil, according to sources. Light crude oil flows freely at room temperature and receives a higher price on the commodity markets because it can yield a higher percentage of petrol and diesel.

Cairn India's exploration campaigns had taken a backseat in India as it got involved with the proposed stake sale of the parent, Cairn Energy to Vedanta Resources. However, now with the deal inching closer to reality, the company has overcome uncertainty.

Drilling one onshore well costs around $35-40 million. Cairn India has a participating interest of 49 per cent, and is the operator. ONGC holds the balance 51 per cent. The initial discovery has opened up a new play in the southern part of KG basin, which is one of the most established basins, sources said, adding that the basin has seen significant success in both shallow and deep waters,

Peers
Company Name CMP
ONGC 279.25
Oil India 454.40
Jindal Drilling&Inds 535.85
Deep Industries 457.70
Asian Energy Service 297.85
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