All’s well for India’s oil and gas future

They are roughly 2,000 kilometres apart and yet the pace of activity or the excitement in the air is unmistakably alike. While one set of them is busy scathing the rocks facing challenges in the desert region of Barmer, Rajasthan, the other is battling violent cyclone storms in water depths of 2,700 metres, six times the height of the Petronas towers in Malaysia, off Kakinada, east coast of the Indian peninsula. These men are set to script the most exciting story in India’s energy history in recent times, and are easily set to be billed as the top newsmakers of 2009. The two discoveries , RIL’s offshore gas project and Cairn’s onland oil discovery, are set to begin contributing to India’s energy kitty in 2009-10, at a time when the country’s trade deficit threatens to cause some serious concerns. India’s exports have been dipping over the last few months and the slowdown in the global economy is only expected to further add to its woes. Add to it India’s gargantuan oil import bill, thanks to huge and growing domestic demand and sky-high crude prices that have softened of late. The two new oil and gas projects that will start producing in year 2009-10 will help meet crucial energy requirements of the country, substituting imports and thereby leading to forex savings. The story of the two major energy projects — Reliance Industries’s Krishna Godavari gas project and Cairn India’s Barmer oil project — which is set to change the energy landscape of the country began almost a decade ago. While RIL’s discovery marked the first private sector foray and strike in India’s oil and gas basins, Cairn’s find was even more fascinating as the London Stock Exchange listed parent company Cairn Plc took up explorations in an abandoned field. Royal Dutch Shell which had been awarded the field on a nomination basis decided to walk out after the initial discovery that showed prospects of just 100 barrels. The story goes that Mike Watts, the exploration director of Cairn Energy who has earned the nickname ‘sniffer’ for his ability to find black gold, went to make the largest onland oil discovery for Cairn in Barmer in early 2004. Reliance, which made the world’s largest gas discovery in 2002 at the KG basin is estimated to have the capacity to produce 550,000 barrels of oil equivalent per day. And this could be just the preamble to India’s natural gas finds.