Black gold in the backyard

ON December 2-3, the second World Oil and Gas Assembly was held in Jaipur. More than 115 delegates from all over the world participated in the meeting. Representatives of top-notch exploration companies such as ENI, British Gas Company, Cairn, Oil and Natural Gas Corporation, Reliance Industries Limited and Premier Oil who were present showed a keen interest in hydrocarbon exploration in the State.

Rajasthan is endowed with favourable geotectonic settings that encourage hydrocarbon formation. It has more than 150,000 square kilometre of land area with a potential for hydrocarbon reserves. Of this, only 30,000 sq km has been under exploration till date. However, the State government plans to increase the extent of exploration as well as exploitation. Since December 2003, the following initiatives were taken:

Oil: In one of the largest on-shore oil finds in the past two decades, oil and gas deposits were found in 12 oilfields in the Barmer-Sanchore basin. The basin is ranked among the top 100 oilfields in the world. This emerged after 100 oilwells were drilled and 350 million tonnes of reserves were created. Of these, the Mangla oilfield is the largest. Commercial production from four oilfields is expected by 2005-06. In the last quarter of 2007, which would mark the peak production phase, a production of about 1,50,000 barrels a day is expected. This would in turn generate a revenue of Rs.2,000 crores a year.

Coal bed methane: According to the Directorate of Petroleum, the State government is developing an alternative source of power generation using coal bed methane (CBM) gas. The State Petroleum Department has undertaken a research and development project to evaluate the CBM resources in Rajasthan, especially in Barmer and Bikaner districts. Only recently, the Central government awarded two blocks of CBM to Reliance Industries Limited in Barmer district after a global competitive bidding.

Underground coal gasification: The State government has signed an MoU with Gas Authority of India Limited to undertake a feasibility study for an underground coal gasification project in Barmer for the purpose of power generation.

Heavy oil: Oil India Limited has entered into an agreement with PDVSA of Venezuela to develop and exploit the heavy oil reserves in the Baghwala area in Jaisalmer. A total of 14.60 million tonnes of heavy oil and 33.2 million tonnes of bitumen reserves have been discovered. Commercial production is expected to begin in another two years.

Gas grid: The Department of Petroleum and Gas Authority of India Limited will conduct a comprehensive gas sector study to assess the demand for gas in industrial, residential, transport and power sectors for the supply of re-liquefied natural gas.

Refinery: For some time now, Rajasthan has been toying with the idea of setting up a refinery. Following persistent efforts, the Central government nominated the ONGC to purchase crude oil from the Barmer-Sanchore basin. This is expected to lead to the establishment of a refinery with a capacity of 7.5 million tonnes a year. The total investment for this will be Rs.9,000 crores.