ONGC approves Cairn's raising Bhagyam field cost to $608 million.

State-owned Oil and Natural Gas Corp has approved its partner Cairn India's raising the cost of developing the second biggest oilfield in the prolific Rajasthan block by 30 per cent to USD 608 million.

Cairn India has revised field development plan of the Bhagyam field in the Rajasthan block by raising the capex required from USD 469.6 million to USD 607.97 million.

The Board of ONGC has approved the revised cost, sources privy to the development said.

Originally, Cairn, which is the operator of the Rajasthan block with 70 per cent interest, had in October 2009 pegged the Bhagyam field development cost at USD 526.1 million.

Later, with a view to expediting the project implementation, it optimised the field development plan (FDP) in August 2010, bringing it down to USD 469.6 million.

ONGC holds the remaining 30 per cent interest in the Rajasthan block.

Sources said Cairn had in the FDP proposed to drill 81 wells to produce a plateau of 40,000 barrels of oil per day (2 million tons a year). An estimated 93.6 million barrels out of ultimate reserves of 415 million barrels was to be recovered till May 2020.

ET