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Essar to ink Ratna output deal in Q1

DNMUM165476 | 3/11/2010 | Author : Sreejiraj Eluvangal | WC :474

Expects to start production by mid 2011, eyes 35,000 bpd peak output

Essar Energy, part of the Essar group, expects to take the first step towards commercialising its largest oil reserve in three months.
The unlisted company expects to sign the production-sharing contract (a precursor to actual development work) for its Ratna block in the next quarter and start production by mid 2011, officials reportedly told investors on Monday.
"They expect peak production of around 35,000 barrels of oil per day," said an analyst who attended the investors' meet.
Ratna, off the western coast of India, is one of Essar Energy's two oil-bearing blocks — the other one, in Nigeria, has been waiting for the signing for production contract for several years.
According to Essar Energy's presentation to analysts, Ratna accounts for 74 of the 87 million barrels of '2C' crude reserves the company has.
'2C' contingent reserves are reserves that have a 50% or more chance of being recovered. They are known as contingent to reflect their uncertain nature. They are considered "potentially recoverable" from known accumulations, but are not currently considered commercially recoverable owing to constraints like environmental impact, policy or other commercial or technical difficulties.
Ratna, owned 50% by Essar, is likely to start with production of 7,000-8,000 barrels of oil and achieve its peak rate 2.5 years after starting production.
Besides Ratna, the company is also likely to star...

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