Cairn Oil and Gas, a Vedanta group firm, has secured a 10-year extension of the contract for its Ravva oil and gas fields off the Andhra Pradesh coast, the company said on Wednesday.
"With this extension, the production sharing contract (PSC) is now valid effective October 28, 2019, for the next 10 years," the company said in a statement.
Ravva, the oldest producing asset for Cairn in India, becomes the first large field to get PSC extension under the 'Policy for the Grant of Extension to the Production Sharing Contracts signed by Government in awarding small, medium-sized, and discovered fields to private Joint Ventures' two-and-a-half-decades ago.
"The extension will enable the joint venture partners to recover about 13 million barrels of oil equivalent (boe) of oil. In addition, the JV partners will invest Rs 550 crore (USD 78 million) to drill seven Revised Field Development Plan (RFDP) wells targeting additional reserves of 11.7 million boe," the statement. "These campaigns put the JV on course for yet another milestone in hydrocarbon recovery from this world-class offshore asset."
Cairn holds a 22.5 per cent stake in the Ravva field, while state-owned Oil and Natural Gas Corporation (ONGC) has 40 per cent. Videocon Petroleum has 25 per cent and Ravva Oil the balance 12.5 per cent.
Ravva oil and gas field is located in the shallow offshore area of the Krishna-Godavari basin on the eastern coast of India. It lies in Block PKGM-1. The field is operated by Cairn.
The Ravva field was initially estimated to produce 100 million barrels of crude oil. It has, however, produced more than twice the quantum of oil initially estimated.
Ravva field was discovered by state-owned ONGC in 1987. It brought out the first oil from the field in March 1993. The field was however auctioned in the same year for development.
The Government of India signed a 25-year PSC with Ravva JV in October 1994.
ONGC drilled 30 discovery wells in the 331.26 square kilometer area in 1987. Oil and gas reserves were found in 21 wells. Ravva JV drilled 29 more wells including two sidetracks, from 1996 to 2002.
Ravva field produces an average of 48,000 barrels of oil equivalent per day (boepd).
Speaking on the development, Anil Agarwal, chairman of Vedanta Resources Ltd, said, "The Ravva PSC extension is one more example of the trust the government has reposed in us. We look forward to working with all our partners towards achieving our vision of contributing 50 per cent of the country's domestic production and supporting the government in its energy security goals."
Cairn said it has been a pioneer in speedy adoption of cutting-edge technologies, which was demonstrated best at Ravva where production was raised from 3,000 to 50,000 barrels of oil equivalent a day.
"Fast-tracking decision making will help quicker and timely recovery of these additional reserves. Ravva is a fine example of augmenting production in an ageing oil field with the help of the most advanced technological interventions in the industry globally.
"We have also always advocated a sustainable and safe work environment and Ravva has been a testament to our efforts with a slew of awards to its credit. Our endeavour is to make Ravva a global case study for enhanced recovery in an ageing oil field," said Ajay Kumar Dixit, chief executive officer, Cairn Oil & Gas.