– The following release was issued today by Sesa Sterlite Limited’s subsidiary Cairn India Limited.
On the Regulatory front, Environment Clearance from RJ block to augment production to 300kboepd was received during the quarter.
During the quarter, we made significant advancements in our exploration and appraisal activities paving the way for future growth opportunities.
During Q1 FY15, we have drilled three successful exploration and four successful appraisal wells.
The fifth rig dedicated to exploration and appraisal commenced drilling in this quarter. With the addition of higher capacity rigs in our drilling program, we have been able to drill two high impact prospects to test potential gas accumulation in the deeper section. The initial results obtained are encouraging and testing is ongoing.
The Declaration of Commerciality for the Nagayalanka discovery is currently under Management Committee review. The evaluation of the results of the Nagayalanka appraisal wells and extended well test is in progress with the objective of optimizing the field development plan. Nagayalanka-NW-1 encountered over 230m of sand in the Jurassic Golapali Formation and an 80m synrift section. Fracking and flow testing of the reservoir sections have been completed and the well has been temporarily suspended pending further analysis.
2128 line km of 2D broadband seismic has been acquired. The processing contract has been awarded and is expected to begin shortly. Planning for acquisition of additional 500 square kilometres of 3D seismic data is underway.
The application for the shift of the restricted boundary has been accepted by government authorities, paving the way for resumption of exploration activity.
In 2013, Cairn concluded appraisal and commercial studies to determine the next steps for the gas discoveries made on the block. We continue discussions with the Sri Lankan Government regarding commercial terms necessary to monetize the discovered gas resources on the block.
Initial interpretations of the 3D volumes over South Africa Block 1 indicate that the acreage contains exciting plays similar to those in offset blocks along the West African margin. A deep water oil and a shallow water gas play comprise two promising play fairways that we will work up through ongoing interpretation.
Based on the preliminary assessment of the seismic data, a working petroleum system with multiple oil and gas plays is likely. The on-going seismic processing and technical evaluation is expected to identify drillable prospects during the remainder of 2014.
Lowering of drilling cycle time and significant improvements in rig movement times are examples of our focus on operational excellence. In line with our adoption of high HSE standards, we are planning to shutdown the processing terminal for around 10 days for routine operational and statutory maintenance activity in August, 2014. This could impact the daily gross average production rate for Q2 FY15. However, we would be utilizing this opportunity to tie-in new facility enhancements related to the development projects.
We continue to focus on executing the major development projects in our Rajasthan Block and the related initiatives for the required facilities’ enhancement.
Ravva block has been an excellent example of good reservoir management. Since inception in 1994, the Ravva block has produced more than 263 mmbbls of crude and over 332 billion cubic feet of gas, more than 2.5 times the initial resource estimates at the time the PSC was awarded.
During the quarter, the block produced 23,940 boepd supported by volumes from 3 new 4D infill wells, with a plant uptime of 99.7%. Due to the need for temporarily shut in wells as a precaution during rig movement, production of oil and gas is slightly muted in Q1 FY15 on year on year basis.
The campaign, based on the 4D seismic survey, commenced in March-14 using a mat supported jackup rig. The infill drilling campaign and prudent reservoir management are expected to sustain production levels and enhance overall recovery factor.
During the quarter, ~1.7 mmbbls of crude and ~2.4 billion scf of gas were sold, averaging 18,960 bopd of crude oil and ~26 mmscfd of gas, respectively.
Since inception in 2002, the Cambay block has produced ~20 mmbbls of crude and over 220 billion cubic feet of gas.
During the quarter, the block produced 10,765 boepd, with a plant uptime of 99.7%. Production was higher on account of successful well intervention techniques undertaken in the previous quarter. In the same period, ~1.1 mmbbls of crude oil was evacuated through sea route. With this route, there has been an improvement in realisations as wells as a reduction in distance covered to transport crude oil by road, thus reducing the safety and environment risk involved.
During the quarter, ~0.9 mmbbls of crude and ~1.3 billion scf of gas were sold averaging 9,406 bopd of crude oil and ~14 mmscfd of gas, respectively.
During the quarter, the technical leadership team has been further strengthened with Director Exploration, Director Subsurface and Head for Integrated Engineering coming on-board to assist in the focused execution of programs. We continue our focus on investing in leaders for tomorrow with a new intake of 72 graduate & management trainees who have joined recently from established institutes like ISM, IIMs & IITs. The young talent helps us address the growing concern of the big crew change and build pipeline for future technical leadership roles.
Our focus is to continue to build on key specialist roles across verticals and to look at employer branding in a big way which will enable us to reach out to the best global talent.
We are committed to meet the highest international standards of HSE and are in the top quartile HSE performance versus our peers as per OGP report 2013. All our operating assets maintain an excellent safety culture in an endeavour to record LTI-free work performance.
LTI frequency (Lost Time Incidents per million man hours) for Q1 FY15 stands at 0.60, higher than 0.16 in FY14, driven by 9 incidents. Primary reason for increase in LTIFR is insufficient control by Contractors with respect to Safety of their employees, especially on public roads. With an objective to prevent the recurrence of such incidents, Know Your Hazard, a program to recognize hazards at work place, has been successfully launched. Communication on driving related Zero Tolerance Behaviour is being reinforced across the contractors and workforce. We also undertook several HSE awareness initiatives like Environment Week celebration across all the sites engaging our employees, contract personnel and local communities.
The board approved the Corporate Social Responsibility policy as per the section 135 of the New Companies Act. In Q1 FY15, we continued to increase the reach of our local content and CSR programs. The major highlights include activities around potable water; education and vocational training, sanitation and healthcare; and enhancing farm productivity:
Going forward the plan is to scale up our existing programs to reach each and every household in our operational area.
Based on our recent exploration successes, we are confident that we will establish ~3bn boe hydrocarbons in-place, significantly ahead of schedule. With renewed focus on appraisal and development, we aim to accelerate 2C-2P resources-reserves conversion. This strategy will contribute to the advancement of reserves booking in order to achieve our stated 2P RRR target of 150% over a three year period.
Cairn India Limited Fact Sheet
The blocks are located in the Barmer Basin, Krishna-Godavari Basin, the Palar-Pennar Basin, the Cambay Basin, the Mumbai Offshore Basin, the Mannar Basin and Orange Basin.
The total resource base supports a long term vision to produce 300,000 boepd, subject to exploration success, further development investments and regulatory approvals.
In Andhra Pradesh and Gujarat, Cairn India on behalf of its JV partners operates two processing plants, 11 platforms and more than 200 km of sub-sea pipelines with a production of over 34,000 boepd as of Q1 FY 15.
*BP Statistical Review of World Energy 2014
Sustainability is at the core of Sesa Sterlite’s strategy, with a strong focus on health, safety and environment and on enhancing the lives of local communities.
This press release contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behavior of financial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different that those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
SOURCE Sesa Sterlite Limited