Mayank Ashar is the managing director and chief executive officer (CEO) of Cairn India. He has more than 36 years of experience in the international oil and gas industry. He previously served in various senior management and top leadership roles in global organizations such as BP, Petro-Canada, and Suncor Energy. He also served as the CEO and president of Irving Oil. In recognition of his operational excellence and large-scale project management leadership in the oil sands project with Suncor Energy, Ashar was named the “Operations Executive of the Year” by the Canadian Business magazine in 2003. Ashar holds bachelor’s degrees in chemical engineering and philosophy and economics, and master's degrees in engineering and business adminstration from the University of Toronto.
What are Cairn India’s major projects?
Cairn India is one of the largest oil and gas exploration and production (E&P) companies in India, contributing approximately 27% of India’s domestic crude oil production. With our affiliates, we have been operating for more than 2 decades, playing an active role in developing India’s oil and gas resources.
Our discovery of the Mangala field, the largest onshore crude oil discovery in India in more than 2 decades, opened up the prolific Rajasthan block. Since the resumption of exploration in 2013, Cairn India has made more than 12 discoveries. The total discoveries in Rajasthan alone are 37.
The Rajasthan block is situated in the Barmer basin. The block contributed about 23% of India’s domestic crude oil production in FY 2015 [from April 2014 to March 2015]. To maximize the potential of the block and enhance ultimate recovery, Cairn India has initiated one of the world’s largest polymer flood EOR [enhanced oil recovery] programs in the Mangala field, which is the largest discovery made in the block to date.
The polymer injection has started and is expected to lead to an increase in production from the field in FY 2016. There are plans to implement similar floods in the other two major fields, Bhagyam and Aishwariya. Apart from its oil reserves, there is a significant gas resource potential in our Rajasthan block.
Together with our joint venture partner Oil and Natural Gas Corp. (ONGC), Cairn India is working toward creating appropriate infrastructure to monetize the gas potential, aiming to double gas production over this fiscal year. In addition, we have plans to drill 42 wells over the next 3 years and build a new processing terminal to increase production to approximately 100 million scf/D. The management committee has approved the Raageshwari deep gas field development plan for 100 million scf/D and contracting for this project is currently under way.
Please provide details about the EOR efforts in the Mangala field.
The EOR potential was recognized early in Mangala and in the analogous Bhagyam and Aishwariya fields (MBA fields). We have collaborated with global experts, major oil service companies, and universities to design the EOR program, which is one of the largest in the world.
The initial polymer pilot demonstrated that the injected polymer solution can mobilize additional oil beyond waterflooding and result in incremental oil production. The overall EOR potential in the MBA fields is around 15% incremental recovery, which translates to around 300 million bbl. The Mangala alkaline surfactant polymer (ASP) program has a capital expenditure (Capex) of USD 600 million cost per estimated ultimate recovery (EUR) and it is hugely value accretive. Government needs to incentivize this kind of recovery.
The polymer flood EOR project is progressing as per schedule. First polymer was injected last October, and the polymer injection rate was ramped up to 25,000 bbl of liquid per day by the end of FY 2015. Injection will continue to be ramped up and scaled up to full field by the end of FY2016. The polymer flood EOR is expected to be also implemented in the Bhagyam and Aishwariya fields.
Following the polymer pilot, the more complex ASP injection in the pilot area has also yielded positive results. The results are being currently evaluated prior to planning for full-field implementation.
What opportunities does the Barmer basin hold?
The Barmer basin continues to be one of our most profitable and productive assets heading into FY 2016. Testing of wells and evaluating tight reservoir discoveries is under way in the basin. Cairn India will focus on the implementation of three major development projects in Rajasthan: polymer flooding EOR, the Barmer Hill oil field, and gas.
The Rajasthan reservoir’s gas potential will play a significant role in establishing Cairn India as a key player in the Indian gas market. We are optimistic that the success of these projects will chart a new growth story for our company. We will also look at re-engineering projects and renegotiating contracts to further improve the viability of our operations.
Cairn India has an investment plan of approximately USD 500 million of net Capex in development and exploration across all assets in the Rajasthan block, of which 45% will be invested in core MBA fields, 40% in Barmer Hill projects, satellite fields, and gas, and the remaining 15% will be toward exploration.
What is the E&P strategy of your company in India?
The Rajasthan block has a significant resource potential of up to 10 billion bbl of initial oil in place. Since the recommencement of exploration in mid-2013 in the block, Cairn India has established 1.4 billion BOE of hydrocarbons. Through various exploration and appraisal activities, the company anticipates adding significant resources to the inventory by end of FY 2016. Testing of wells and evaluating tight reservoir discoveries is under way in the Barmer basin. Technology will also be a game changer for Cairn India. As more easily accessible resources get exhausted, the strategy will be to rely on the most recent and innovative technology to meet increasing energy demands.
We have executed the largest exploration and appraisal program in Rajasthan to date having drilled 34 exploration and appraisal wells during the year. Our tight oil reservoir monetization efforts last year were focused on Mangala, Aishwariya, and the appraisal phase of Barmer Hill development, which now has been completed. Our key learnings have been around productivity of horizontal wells and the ability to fracture various zones in the Barmer Hill reservoir. These learnings prepare us well for a ramped up field development plan in the coming years. We will also be developing viable satellite fields in a similar phased manner.
What are the main operational challenges you have faced?
India has a high-risk geology, but with significant E&P potential. To reduce dependence on crude oil imports, it is imperative to facilitate E&P in the country, attract investments, and enhance domestic production. However, investments are not forthcoming. Contractual/fiscal models and policies should incentivize the sector and should be aligned to balance the risk/reward ratio.
In the current low oil price scenario, response will have to be nimble to the oil and gas sector developments. Responsiveness, flexibility, and stability are critical for successful outcomes. The need of the hour is an integrated view and cognizance of the fact that maximizing production will maximize returns for all stakeholders.
What are the key technologies used in the operating fields?
Cairn India is known for adopting best-in-class technology. We ensure that we harness new technologies to enhance our projects while ensuring safe and economical extraction of oil and gas that were previously unreachable. These are some of the key initiatives at Cairn India.
World’s longest pipeline: In just 2 years, we built the world’s longest continuously heated pipeline of approximately 700 km in length, a first for any oil independent. The Mangala Development Pipeline (MDP) is designed to transport the crude oil produced from the Rajasthan assets and provide access to markets.
The technological ingenuity of MDP was necessitated because of the waxy nature of the crude oil, which requires the oil to remain above the wax appearance temperature of 65°C through the entire length of the pipeline. This resulted in customizing existing heating technology into the skin effect heat management system, an innovative system and by far the longest of its kind in the world today.
ASP EOR pilot: The Mangala ASP pilot has been successfully completed, and we had an excellent response to the injected ASP chemicals. The water cut of the pilot well declined from 90% to between 20% and 30%, and this was observed within 3 weeks of the ASP injection. Based on the pilot results, we see incremental recovery from 10% to 15% over and above the polymer flood. We are very pleased with the results of the pilot and are modeling for full-field commercial expansion of ASP across the MBA fields.
4D seismic: The successful application of 4D monitoring techniques after 15 years of production at the Ravva field in the Krishna-Godavari basin has led to identifying additional oil and increased production. Seismic data were acquired using state-of-the-art ocean-bottom cable survey technology with high accuracy for the first time in India at the field. Several unswept areas were identified. The EUR as a result of good reservoir management and successful application of 4D seismic is expected to be approximately 55%.
The 4D seismic program and the successful infill drilling campaign has added incremental production of around 10,000 BOPD in the past fiscal year.