The past, present and future of hydrocarbons in Rajasthan

The world runs on fossil fuels even today. The state of Rajasthan is one of the most significant producers of crude oil and natural gas with four basins across 14 districts. But, what led to this and what does the future hold?

 

Most of us already know that crude oil and natural gas are mixtures of hydrocarbons that are formed deep beneath the earth’s surface. While both of these take shape from plants and animals that lived millions of years ago, their compositions are different. Crude oil, which is also refined to make petroleum products, is found in liquid form and natural gas exists as vapour.

Well, immaterial of their origins and molecular structure, the world runs on fossil fuels. They are used to run industries, power homes and officers, propel vehicles among several other applications. And, not only are we dependent on them, but have made them an indispensable part of our lives.

Today, Rajasthan is one of the biggest producers of hydrocarbons contributing around 23 percent of the total crude oil and 5 percent of the natural gas production in India. But, how did the state come to be a frontrunner in this sector?

The past

In 1992, the multinational oil and gas company Royal Dutch Shell, commonly known as Shell, bagged a license from the Indian government and entered into a Production Sharing Contract (PSC) with them.

A few years later, the organisation started digging exploration wells. Soon, a worker from Cairn Oil and Gas (which then held a 10 percent stake in the leasehold) who was at the site noticed oil dripping from the logging tool probe, a sensor that helps determine the type of fluid as it moves up and down the well.

Subsequently, 27 percent of the contract was sold to Cairn (now merged with Vedanta) and this was again increased to 50 percent in 1999. Later, Cairn bought a majority of Shell's lease holding for $7.25 million. In 2004, it spotted oil equivalent to several barrels at Mangala located in Barmer. Manmohan Singh, the then Prime Minister opened the valve and inaugurated the first barrel of oil production at Thar in 2009.


The Government owned Oil and Natural Gas Corporation (ONGC) exercised their right as part of the terms of the PSC to grab a 30 percent stake in the two fields as well as the other future discoveries in the block.

So, by 2015, Cairn was developing multiple oil fields. While Development Area (DA) 1 encompassed Mangala, Aishwariya, Raageshwari and Saraswati (MARS) fields, DA 2 consisted of the Bhagyam, Shakti fields and DA 3 had the Kaameshwari West fields.

The present

Today, according to the Directorate of Petroleum, Government of Rajasthan, the state has four basins across 14 districts such as Barmer, Jaisalmer, Bikaner, Ganganagar, Hanumangarh, Jalore, Jodhpur, Kota, Jhalawar, Baran, Bundi, Bhilwara, Churu and Chittorgarh spread over an area of 1.5 lakh square kilometers. The maximum on-land exploration for oil and gas that has been taken up so far sums upto 60,000 sq. km spanning 21 blocks.

In 2018, Cairn received exploration licenses for 41 of the 55 oil and gas blocks in a few more regions of Barmer and Jaisalmer. And, as per the latest estimates, the potential of Barmer-Sanchore Basin itself stands at approximately 5.2 billion barrels of oil. A total of 552 million barrels of crude oil has already been produced from it from 2009 to March, 2020.


The Barmer Basin of Rajasthan as a major new hydrocarbon province.


But, to date, 990 wells have been gouged, out of which 783 of them were taken up by Cairn in Mangala Barmer basin and Jalore and 207 by entities like Focus Energy, Essar Oil, HoEC, GSPC, ONGC, OIL, ENI GAIL in Jaisalmer, Ganganagar & Bikaner.

Most of the crude oil from the Mangala field is transported to the Mangalore Refinery and Petrochemicals (MRPL), Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation (HPCL). As per sources in Cairn, this was being done through trucks, but now, a 670 kilometer crude oil pipeline - the Mangala Processing Terminal (MPT), is being laid from Barmer in Rajasthan to the Jamnagar district in Gujarat. Being the longest continuously heated pipeline in the world and the first such in India, around 16,000 people are presently working on the construction activity. The contract for this was awarded to Larsen & Toubro (L&T).


Minister of Petroleum and Natural Gas, Veerappa Moily (extreme left) and Rajasthan CM Ashok Gehlot (extreme right) inaugurating the commercial sale of gas from the Cairn India-ONGC block in Barmer.


Cairn has also been leveraging a few newfangled technologies. According to sources in the company, one such technology is well pad drilling which involves the drilling of multiple wells at a single site without having to move the rig too much.

Conventional extraction methods involve drilling down vertically for each well, disassembling the rig, hauling to the next pad and then reassembling it, even if the new location is just a few inches away. Pad drilling on the other hand helps target underground resources with minimal impact on the surface. Besides, it is believed to enhance rig productivity, expand production capacity and save costs in the long run.


Another technology that is being implemented is Enhanced Oil Recovery (EOR) wherein elements like carbon dioxide and water, heat, natural gas or chemicals are injected to lift, displace and extract the oil which would have otherwise been difficult to draw out. Experts say that the recovery rate of oil when EOR is carried out is around 15 percent more than when traditional methods are applied.


Recently, domestic crude production contracted by 5 percent and the output at the Cairn Vedanta-owned Rajasthan oil fields too fell. This was mainly attributed to COVID-19.

The future

It is clear that Rajasthan has one of the best reserves of oil and gas in the country. And, the execution of new growth projects has been paving the way for further development. Considering that the country’s share in global energy consumption is projected to increase two-fold by 2035, the sedimentary deposits in the state will come into use.


Rajasthan has one of the best reserves of oil and gas in the country

Recently, while celebrating 12 years of production at Mangala, Prachur Sah, Deputy CEO, Cairn Oil and Gas, said, “Since the discovery of first oil in 2009, the Mangala field has lived up to its name to truly become auspicious for the country’s energy needs. We have followed a path of continuous innovation, research, and adoption of new technology to maintain production levels. Moving ahead, Cairn Oil and Gas is committed to contributing 50 percent of India’s domestic crude oil production. For this, the Rajasthan block and Mangala particularly, will continue to play a driving role.”


In addition to all this, the government is kicking off quite a few initiatives to boost hydrocarbon production. In February 2021, Prime Minister Narendra Modi announced that the Government of India plans to invest Rs. 7.5 trillion (US$ 102.49 billion) on oil and gas infrastructure in the next five years. Four months later, the government also notified that it will auction unmonetized oil and gas fields of ONGC and OIL in Rajasthan.


 

Edited by Aparna Chandrashekhar

Cover image illustration by Jyothi Syam

 

Some resources and links to help you learn more on the future of hydrocarbons in Rajasthan:


Rajasthan: Boost for hydrocarbon exploration as companies can take land on lease