British oil major Cairn Energy said on Tuesday that it plans to step up its oil exploration activities in Rajasthan following last week's "significant" oil find, rated as one of the biggest discoveries in 2004.
Cairn CEO Bill Gammell told rediff.com in an exclusive interview from his Edinburgh headquarters that the find could amount to as much as 1.1 billion barrels, out of which 30 per cent might be recoverable.
"What we've said is that the find is between 450 million and 1.1 billion barrels of oil in place," Gammell explained. "Then you have the recovery factor. You can get 10 per cent of the reservoir, 20 per cent or may be 30 per cent. You may also have to do water flooding.
"We've indicated that somewhere between 50 and possibly 200 million barrels is what we expect from this field and we're going to have to do some production testing.
"It may have the capacity of producing 30,000 barrels a day. We don't know that. But if that's the case then it's very significant."
Gammell, who has personal association with the Texas oil industry and US President George Bush, has been something of a lone voice in the oil exploration industry for his consistently articulated views that India is one of the most under valued oil producing countries in the world.
"I've always said I think this (Rajasthan) was an under explored area," he explained. " I've always said for years that India is hugely under explored. ONGC have done a great job to date but they haven't had the ability to get right round the country.
"We'd like to have them as our partner, and we can learn from each other."
Cairn is currently a partner in the Ravva off shore oil field near Chennai, as well as gas fields off the west coast in the Gulf of Cambay. The latest oil discovery in Rajasthan represents about a quarter of the reserves of Bombay High.
Gammell explained that his company's relationship with Rajasthan dates back to 1997 when Cairn bought out Shell in Bangladesh and acquired a share of the Rajsathan field as part of the same deal.
"We had a 10 per cent interest in the Rajasthan block. We then increased our share to 27 and a half per cent prior to the drilling of the first well and during the drilling of the same we increased our stake to 50 per cent amid the Guda II discovery (the Shell led consortium discovered the Guda II oil well in Rajasthan in July 1999). Having made that discovery we were excited because we'd found oil a long, long way away from previously known oil reserves.
"To me it looked like West Texas 50 years ago when you were opening up a new province.
"We drilled another well with Shell -- the Saraswati discovery -- and then before the license could expire, we negotiated an extension with government and bought out Shell's position. So we had 100 per cent.
"We went behind that pretty aggressively and last week we announced that to date 10 out of the 14 wells had hydro carbons in them and to me that was extremely significant, notwithstanding the fact that not one well indicated at that time that we necessarily got what I call a home run.
"So we were moving the drilling rig six kilometres north where we thought there was a chance of better reservoir and wondered if the oil had migrated that far north. What we discovered was that it indeed has and in quite a big way. We have a series of other fault blocks in that area which we intend to drill pretty quickly. I think we may be opening up an exciting new province up there."
