ONGC to increase stake in Gulf of Khambat joint venture with Cairns Energy to 40%

New Delhi, June 3: The Oil and Natural Gas Corporation (ONGC) will increase its stake to 40 per cent in its Gulf of Khambat Oil and Gas Block joint venture with Cairns Energy of the UK.

"We have decided to increase the stake to 40 per cent in the Lakshmi Oil Find in the CB-OS/2 Oil and Gas Block in the Gulf of Khambat," a senior ONGC official said.

At present, the British company has 80 per cent interest in the consortium, ONGC 10 per cent and Tata Petrodyne 10 per cent. However, ONGC has an option to increase its stake by 30 per cent if a commercial discovery is made; Cairn Energy’s stake would then be reduced to 50 per cent.

Cairn Energy is the operator of the field. "We have studied the extent of oil and gas reserves in the four discoveries made so far by the joint venture and have decided to increase the stake in the Lakshmi find," sources said.

ONGC was keen on increasing its stake in the block but a final decision would be taken only after due delligence on the prospects of the field and the extent of commercially exploitable reserves, they said.
The consortium plans to invest 200 million dollars in developing the block. It is planning to drill around 11 wells in the block during 2001, sources said.

Cairn Energy-led consortium has made four hydrocarbon discoveries in the block where 3D Seismic survey has been carried out on the 1,500 sq km block. Gas was first struck in the block in May 2000 in the Well CB-A-1, better known as Lakshmi Prospect, and initial tests showed that gas flowed at a rate of 0.8 million cubic meters per day.

The second discovery was made in Well CB-B-1, known as Prospect Gauri, where gas flowed at the rate of 0.53 million cubic meters per day and 0.48 million cubic meters per day, sources said adding another zone in the well also flowed oil and gas at the rate of 1039 barrels of oil per day and 0.02 million cubic meters of gas per day.

Cairn had a third hydrocarbon discovery in exploration well CB-C-1, called Prospect Ambe, located about six kilometres south-east of the Lakshmi gas discovery, he said adding gas flowed at 39.2 million cubic feet per day while oil flow stabilised at 1,039 barrels per day.

Exploration Well CB-G-12, Prospect Parvati, located 10-km north of Lakshmi gas field, encountered several oil pay zones at the second target level below 1,100 metres in February 2001.

The well encountered only small gas columns at the main target level. A multi-zone test flowed oil and water at rates varying from 1,200 and 2,200 barrels of fluid per day with a water content varying between 5-25 per cent.

Sources said the four discoveries, which are on trend with the southwest of Hazira field, holds between 100 and 300 billion cubic feet of gas equivalent.

"Future development options for the discovery are being considered. The field could be developed as a stand-alone field or tied back as a satellite development to either Lakshmi or Hazira," they added. (PTI)