The Scottish oil and gas company Cairn Energy PLC has spelt out the working programme of its US$63 million investment plan to the Energy and Mineral Resources Division (EMRD) for initiating drilling works of three development wells in the Bay of Bengal from November. Sources said Cairn will complete drilling of a production well at offshore Sangu gas field, an appraisal well at South Sangu and an exploration well at Hatiya within April 2007. "We have already booked a Norwegian rig on rental basis to conduct the drilling activities at $185,000 per day," a senior official of the company told the FE. He said the rental price of rig is scaling up across the world due to increase in oil price. "Hiring price of a rig was $155,000 per day last year and merely $60,000 six years ago," the Cairn official said preferring anonymity. A special kind of diesel - marine diesel oil (MDO) - is used for operation of such rigs Continued to page 7 Col. 3 M Azizur Rahman The Scottish oil and gas company Cairn Energy PLC has spelt out the working programme of its US$63 million investment plan to the Energy and Mineral Resources Division (EMRD) for initiating drilling works of three development wells in the Bay of Bengal from November. Sources said Cairn will complete drilling of a production well at offshore Sangu gas field, an appraisal well at South Sangu and an exploration well at Hatiya within April 2007. "We have already booked a Norwegian rig on rental basis to conduct the drilling activities at $185,000 per day," a senior official of the company told the FE. He said the rental price of rig is scaling up across the world due to increase in oil price. "Hiring price of a rig was $155,000 per day last year and merely $60,000 six years ago," the Cairn official said preferring anonymity. A special kind of diesel - marine diesel oil (MDO) - is used for operation of such rigs during drilling activities, he added. The Norwegian rig is expected to reach Chittagong port on the third week of November next from Russia. The Anglo-Dutch oil and gas exploration company -- Shell Plc -- is now using the rig for drilling in Russia. Drilling works in the Bay of Bengal will initiate immediately after the arrival of the rig. It usually takes 30-40 days to drill a well, they added. Cairn sources said after completing drilling of the three wells the company has also a plan to drill one more exploration well at Meghnama by April 2007 if weather permits. Of the planned investment $32 million will be needed for Sangu gas field development, $18 million for drilling exploratory wells at Hatia and the remaining for the appraisal well at South Sangu, company sources said It will drill the production well at Sangu gas field first to enhance its production capacity by 25 million cubic feet per day (mmcfd) by next winter. The country's lone offshore gas field Sangu's production will reach 175 mmcfd after drilling of the production well. In January 2006, Sangu produced 150 mmcfd of gas, while in February it produced 137 mmcfd on an average, Cairn sources said. Senior Cairn officials Thursday met with the EMRD Adviser Mahmudur Rahman and discussed at length about their future activities. The EMRD earlier approved Cairn's $63 million investment plan in the first week of March to enhance Sangu's production to meet the growing gas demand in the country. Cairn placed a proposal to the EMRD in January, 2006 seeking approval for further investment arguing that production from Sangu gas field will decline significantly unless no new wells are developed there. Cairn discovered and developed the Sangu gas field at offshore Chittagong during the 1990s. It was later handed over to Anglo-Dutch oil and gas company Shell in 1997 and retaken from Shell in 2004. Apart from its operations at Sangu gas field, Cairn is currently engaged in exploratory activities in blocks 5 and 10, where new seismic data has been acquired, and it has tied up with Chevron Corp in block 7, where seismic activities commenced recently.
It has identified a new prospective gas field at Char Jabbar under Noakhali district in block 10 with an indication of 2.30 trillion cubic feet (TCF) of gas reserve. Cairn has also conducted seismic surveys at Meghnama and at Hatia under hydrocarbon block 16. There are possibilities of finding gas reserves of about 3.5 TCF at Meghnama and 1.76 TCF at Hatia, the company sources said.
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