We have a proven track record of creating and delivering value through production.
Producing assets are an important part of a well-balanced oil and gas exploration and development portfolio. We realise value in development assets by choosing to sell an interest and return cash to shareholders or by choosing to develop an asset, either ourselves or with a partner.
We work with our partners to take our assets from discovery to development safely. Cairn’s quick decision making, agility, emphasis on safety and the ability to form strong and lasting relationships has benefitted not only the business but all stakeholders.
Cairn's development assets are currently focused in the UK and Norway. Kraken and Catcher, two of the largest ongoing projects in the UK North Sea, are the Group’s core development projects. They are both under development and will provide free cash flow from 2017 with peak net production to Cairn of ~25,000 boepd. At the peak of production in 2017/2018 it is anticipated that Kraken and Catcher combined could account for around 7% of UK total daily boe production1.
1. Based on Oil and Gas UK Activity Survey 2014.
History of successful development
Cairn has been operating in South Asia since 1990. Cairn has made more than 40 oil and gas discoveries onshore and offshore in Rajasthan (North West India), the Cambay Basin (West India), Ravva (East India) and the Bay of Bengal (Bangladesh). The three largest Rajasthan fields alone Mangala, Bhagyam and Aishwariya (MBA) and Ravva (East India) have gross recoverable reserves of one billion barrels of oil equivalent and the potential to produce more than 30% of India’s domestic oil production.
These developments demonstrate Cairn’s ability to safely, quickly and successfully deliver complex, large-scale oil and gas developments. The Rajasthan development in particular emphasises Cairn’s capacity for managing unique operational challenges such as working in an environment with extreme temperatures and operating in a remote location with limited infrastructure.
The success of Cairn’s operations in India has enabled the Company to return approximately $4.5 billion to shareholders over the last five years. Today, Cairn holds a ~10% shareholding in Cairn India.
Rajasthan, Northwest India
Rajasthan, Northwest IndiaThe Rajasthan fields lie in the heart of the Thar desert in the Barmer district in northwest India. Cairn acquired an interest in the Rajasthan block in 1997 and, in 2003, acquired 100% of the exploration interest and took over as operator of the block.
In 2004, we discovered Mangala, the largest onshore hydrocarbon find in India in the past 25 years. Bhagyam and Aishwariya, the second and third largest discoveries respectively, followed. Together, these ‘MBA’ fields make up our core resource base.
Cairn has made more than 25 discoveries in the Rajasthan block, with the discovered resource potential currently estimated at 6.5 billion barrels of oil equivalent. Of this, the MBA fields have gross recoverable reserves and resources of over 1 billion barrels.
The Rajasthan development is one of the largest oil and gas projects in India. We successfully took this project from discovery to production in just over five years – from the discovery of the Mangala field in early 2004, to production of first oil in mid 2009.
Key features of the development are the Mangala Processing Terminal (MPT) and the heated export pipeline.
Mangala Processing Terminal
The Mangala Processing Terminal (MPT) currently processes oil from the Mangala and Bhagyam fields.
It covers an area equivalent to 200 football pitches and contains more than 80km of roads, comparable with the distance from London to Brighton. The MPT was planned, built and completed in a little over two years.
Constructing the world’s longest continuously heated pipeline, currently some 590km long with an additional 80km being built, has given the joint venture partners access to more than 75% of India’s refining capacity.
To carry Rajasthan’s crude to market, Cairn built the world’s longest heated pipeline. Starting at the MPT in Barmer, the US $1 billion pipeline runs 590km to Salaya with the remaining 80km under construction to Bhogat on the Arabian Sea. Once at its full length, the pipeline will access more than 75% of India’s refining capacity.
Sangu – Bay of Bengal, Bangladesh
Cairn discovered gas in the Sangu-1 well, Block 16 in 1996 – it was the first gas field discovery offshore Bangladesh.
In July 1997 we signed an operational alliance with Shell over the whole of Bangladesh. The Sangu field development was fast-tracked, with the first gas produced in 1998, just 19 months after the initial discovery.
We acquired Shell’s 37.5% stake in the Sangu gas field in 2003 and assumed operatorship until 2010, when we sold our interest to Santos.
Ravva – Krishna Godavari Basin, East India
The Ravva block lies off the coast of Andhra Pradesh, in water depths of up to 80m in the Bay of Bengal. Cairn acquired interests in, and became operator of, this offshore oil and gas field in 1996.
The Ravva field’s reserves doubled in 1999 and production increased from 3,700 bopd to 50,000 bopd.
In 2011, Ravva celebrated 15 years of production. More than 230 million barrels (mmbls) of oil have been produced from the field, 131 mmbls more than the 101 mmbls originally anticipated.
Cambay Basin, West India
The Lakshmi and Gauri offshore fields and the CB-X onshore field make up Cairn’s operating assets in the Cambay Basin off the Gujarat coast.
We discovered the Lakshmi field in 2000 and made the second discovery in the CB-OS/2 block, the Gauri field, in 2001.
Discovery to delivery took a little over two years. The natural gas and crude from these fields is processed at an 82-acre onshore facility at Suvali.
The Ravva, Cambay and Rajasthan developments in India and the Sangu development offshore Bangladesh demonstrate our ability to safely, rapidly and successfully deliver large-scale oil and gas projects.