Cairn gets 10-yr extension for Ravva oil field

New Delhi: Cairn Oil and Gas, a Vedanta group firm, has secured a 10-year extension of the contract for its Ravva oil and gas fields off the Andhra Pradesh coast, the company said on Wednesday.

"With this extension, the production sharing contract (PSC) is now valid effective October 28, 2019, for the next 10 years," the company said. Ravva, the oldest producing asset for Cairn in India, becomes the first large field to get PSC extension under the 'Policy for the Grant of Extension to the Production Sharing Contracts signed by government in awarding small, medium-sized, and discovered fields to private Joint Ventures' two-and-a-half-decades ago.

"The extension will enable the joint venture partners to recover about 13 million barrels of oil equivalent (boe) of oil. In addition, the JV partners will invest Rs 550 crore ($78 million) to drill seven Revised Field Development Plan (RFDP) wells targeting additional reserves of 11.7 million boe," the statement said.

Cairn holds a 22.5 per cent stake in the Ravva field, while state-owned Oil and Natural Gas Corporation (ONGC) has 40 per cent. Videocon Petroleum has 25 per cent and Ravva Oil the balance 12.5 per cent.

Ravva oil and gas field is located in the shallow offshore area of the Krishna-Godavari basin on the eastern coast of India. It lies in Block PKGM-1. The field is operated by Cairn. The Ravva field was initially estimated to produce 100 million barrels of crude oil. It has, however, produced more than twice the quantum of oil initially estimated.