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Cairn India Rajasthan Northern Area Development Projects Contractors / Suppliers Presentation January 2006.

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Presentation on theme: "Cairn India Rajasthan Northern Area Development Projects Contractors / Suppliers Presentation January 2006."— Presentation transcript:

1 Cairn India Rajasthan Northern Area Development Projects Contractors / Suppliers Presentation January 2006

2 Cairn India Northern Field Developments  Contents  Cairn India  Field Development Plans  Mangala Field Development  Status  Contracting Strategy  Local Content strategy  Execution strategy  Cairn team  Payment for work done  Project objectives  Core issues  Strategic view  Expectations

3 Cairn India  In India since 1995  Head Quartered at Gurgaon, Haryana  Two Existing producing assets at Ravva, CB-OS/2 including Lakshmi and Gauri  With New World Class Resource Base in Rajasthan where :-  Cairn has 100% interest during Exploration Phase  70% interest during Development & Production Phase with ONGC as JV partners having 30% interest

4 Cairn India Ravva – Facilities Onshore Plant Capacity Gross Fluid Handling 90,000bpd Crude70,000bpd Gas Processing2.7 MMSCMD Water Injection1,10,000 bpd ETP20,000bpd Crude Storage1 Million BBLS Power Generation10MW  Opex <$1/boe  ISO 14001 certified - Zero flaring  Uptime of Equipment : >96% Offshore Platforms8 (Unmanned) Export FacilitySingle Point Mooring Sub-sea Pipelines22, total ~170KM Cairn India

5 Onshore Plant Capacity Gas Processing150 MMSCFD Crude5,000 bpd ETP3,000 bpd Crude Storage28,300 bbls Power Generation 5MW CB-OS/2 : Lakshmi & Gauri Facilities Offshore Platforms 3 (Unmanned) Sub-sea Pipelines 36 KM, 24 inch 5 KM, 12 inch  ISO 14001 certified  Uptime of Equipment : >96%

6 Cairn India CBOS/2 – Future Development Declaration of commerciality Jan 2006 FDP under preparation Lakshmi Gauri North Tapti Ambe Hazira Shell /Total LNG Terminal 4 well drilling programme in 2007 to access untapped natural gas & apprise further crude oil potential Suvali Terminal FDP approved in March 2006 Development for gas is ongoing Ambe Lakshmi & Gauri CB-X

7 Cairn India Rajasthan – Block Overview  Major discoveries in Rajasthan  ~130 wells drilled, 20 discovers to date  Significant discoveries are Mangala, Aishwariya and Bhagyam  New oil province established – resource base around1 billion barrels  Over US$600m (net risked capital) investment to date  Target Block Production ~150,000bopd Total original block area = 11,108 km 2

8 Cairn India Northern Field Developments  Field Development Plans  We are aiming for Saraswati and Raageshwari oil fields to be on stream in 2007 subject to GOI approval and finalisation of an oil sales agreement. As of today some wells are available for export of oil  Mangala oil field, including Raageshwari gas field and the Thumbli water aquifer, is the first major field to be developed  Next in line will be Bhagyam / Shakti and Aishwariya oil fields, 6 and 12 months behind Mangala respectively. Detailed design and engineering is being run in parallel  A single MPT (Main Process Terminal) will be constructed to accommodate these fields

9 Cairn India Northern Field Developments  Field Development Plans (cont)  Other smaller fields will be looked at on a case by case basis as the infrastructure surrounding the larger discoveries are completed e.g. Raageshwari Oil  Cairn continue to appraise further areas of the existing Rajasthan blocks

10 Cairn India Rajasthan – Development Schedule

11 Cairn India Northern Field Developments  Current Status  Sanction  Funding in place  Target for Mangala oil at 100,000 Boe/day is 2009  Procurement  EOI’s issued expect complete early 2007  RFQ’s issued expect complete end 2007

12 Cairn India Northern Field Developments  Current Status (cont)  Engineering  Mangala and Raageshwari gas detailed design at 20%  Bhagyam, Shakti, Aishwariya concept selection complete FEED in progress and due to complete April 2007  Site  Pioneer Camp (site office) in place  Site fence erection in progress at Terminal site

13 Cairn India Northern Field Developments  Current Status (cont)  Still to be developed  Raageshwari Oil Field  Raageshwari deep gas  Other small fields following main infrastructure completion  Other Projects  X-port Pipeline – FEED/concept select in progress – to complete January 2007  Expected value $340m (Rs 1,500 crore)

14 Cairn India Northern Field Developments FDP Approval of MARS Fields Government Approval May 2006 Funding Banking Syndicate (+ IFC) Signed Detail design contract Mustang Engineering, Houston Oil sales agreement Principles embedded in PSC - Detailed negotiations ongoing Land acquisition Phase 1 & II now completed} Environmental clearance Granted by MoEF Water usage approval Granted by Rajasthan State Supplementary gas source for fuel supply Raageshwari gas Water source Substantial saline aquifers Approvals Status

15 Cairn India Mangala Processing Facilities Animated views of Mangala processing facilities Slug Catcher

16 Cairn India Mangala Field Development  Contract Strategy  Detailed Design Work  Man hour reimbursable at rates  Existing contract for Mangala with Mustang Engineering Houston. Work subcontracted to L&T Valdel in Bangalore and JPK Triune in Delhi  Procurement  Lump sums supply – currently by Cairn, option for main contractors to procure for and on behalf of Cairn  Main Contracts  Based on cost reimbursable rates measurable using RHICOMS  (Rider Hunt International Common Norms)  Bill of quantities with agreed measure on a monthly basis  Commissioning and Start-up will be by Cairn with contractor support at reimbursable man hour rates

17 Cairn India Mangala Field Development  Local Content Strategy  We are committed to maximising local content levels. Main contractors will be required to meet the minimum local content requirements.  We intend to nominate subcontractors where we feel confident that a local contractor would have the required experience and quality standards required

18 Cairn India Mangala Field Development  Execution Strategy  Site living and sleeping accommodation will be provided by Cairn through a separate sub-contract. We would expect any site offices to be provided by the individual contractors. Cairn will provide and give access to any land required for offices and storage of materials.  We would expect personnel to be rotated out of site  Procurement of key long lead equipment is being carried out by Cairn from their India HQ at Gurgaon.  Manufacturing and materials will be based on preferred Indian content

19 Cairn India Mangala Field Development  Execution Strategy (cont)  Main Contracts, preferred Indian JV or partner contractors with experience and capability, execution to mechanical completion, bulk procurement  Contact split as follows  Main Civil Contractor  Main Mechanical  Main Instrument and Electrical  Pipeline (s)  Camp Provider  Freight forwarding  ICS (integrated Control System)

20 Cairn India Mangala Field Development  Execution Strategy (cont)  Main Civil Work Scope  All civil engineering work with in the development area. To include roads, all building, tank, plant and process equipment and pipe work foundations, excavations, underground concrete tanks and separation pits and the like.  Main Mechanical Work Scope  All mechanical equipment installation, hook-up and mechanical commissioning to hand over. To include all site erected tanks and associated pipe work.

21 Cairn India Mangala Field Development  Execution Strategy (cont)  Main E& I work Scope  To include all HV and LV cable installation terminations, transformers, JB’s and testing to mechanical completion. Includes all security installation work and telecommunications. Include inter field HV transmission lines  Pipeline  To include all interconnecting pipelines from Thumbli Field to Mangala and from Raageshwari to Mangala. To include all excavation, rail and road crossings, welding and backfilling. To include commissioning to mechanical completion.

22 Cairn India Mangala Field Development  Execution Strategy (cont)  Camp Contractor  Provision of 130 client accommodation and 2500 construction accommodation camps. To include provision of all hotel services for multi cultural work force. Provision of camp to include provision of water and sewage management and waste disposal.  ICS Contractor  Provision of all hard ware and software associated with the development of a fully integrated process control system. Provision will include the function testing and commissioning of the system. Contract to include provision for ongoing maintenance work

23 Cairn India Mangala Field Development  Execution Strategy (cont)  Note  All contracts will have potential for the extension of the work to include the development of the Bhagyam, Aishwariya and Shakti fields currently in FEED design.

24 Cairn India Northern Field Developments  Payment  Cairn Finances are in place as widely reported.  Work will be carried out on RHICOMS. Work will be measure monthly and appropriate valuation submitted for payment.  Mobilisations and de-mobilisations to site are Lump Sum  Cairn are implementing a SAP financial system such that all payments will be expedited effectively

25 Cairn India Northern Field Developments  Project Objectives  Schedule – to meet 2009 production target  Quality - to meet international standards and achieve greater than 98% reliability of the process plant in continuous operation  Safety – zero fatalities and a TCRF of less than 0.7  Environmental – to have zero releases and minimal long term environmental impact  Cost - to meet approved budgets

26 Cairn India Northern Field Developments  Core Issues  Remote location little or no infrastructure  Low indigenous skill base in Rajasthan but who have high expectations  Water supply currently aim to develop water aquifers at Thumbli but this will be in parallel with construction work  Safety is always a challenge but zero fatalities is a must

27 Cairn India Northern Field Developments  Expectations  We expect to have RFQ’s for Mangala developments issued by the end third quarter of 2007. Long lead items by end first quarter 2007  We expect to place all main contracts by end of 2 Q 07  Expected start dates on site as follows :  Civil End 2Q 2007  Mechanical End 3Q2007  E&I End 3Q 2007  Pipeline (infield) End 4Q 2007

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