relinquishing two-thirds of the area. It has made 26 discoveries so far.
The Mangala, Bhagyam and Aishwarya fields constitute Cairn Indiaís main assets in Rajasthan. The block was initially held by Royal Dutch Shell in 1995, which Cairn subsequently bought.
Cairn also suggested that the declaration of commerciality is redundant for further discoveries in the acreages within the existing development areas. The IBDP also seeks to allow extended well tests and modular early production systems for all feasible discoveries. This is a standard practice in the US and helps ramp up production early on.
Cairn has also called for first-level detail of plans and projects for all pre-development and development related work for the three years of the IBDP. The IBDP also includes annual work programmes and budget revisions to reduce time-consuming deliberations between stakeholders.
For Cairn, the Rajasthan block is considered a very promising one as far as potential reserves are concerned. To date, Cairnís 26 discoveries in the block put its in-place reserves at around 7.3 billion barrels of oil equivalent. Under the cost-recovery model currently in force, the government earns profits from an oil and gas field only after the operator has recovered all of its investments. So, the government gives approvals only on establishment of a discovery as commercially viable.