Cairn India Limited
Delivering Growth through Transformation
Content Cairn India’s journey
03
Our Journey since IPO: Consistent delivery of growth
05
Our Heritage
05
Our Vision and Core Values
07
Discovering Energy for Growing Economies
08
Growing assets in the region
13
Developing the Rajasthan Discoveries
15
Rajasthan Upstream
18
Exploring to Discover
24
People Our Assets Highest Priority Safe Operations
27
Competitive Advantage
31
Producing Hydrocarbons Responsibly
32
28
Rahul Dhir Managing Director & CEO
Foreword The pursuit to harness energy, which plays an instrumental role in economic growth, continues unabated. As in the past, it is expected that the demand for energy will
is encapsulated in the 3R’s – Respect, Relationships and
continue to outpace supply in future. This makes it critical for
Responsibility. Working closely with our stakeholders and
all growing economies to secure energy supplies to meet the
communities in our areas of operation, Cairn India has helped
growing needs of the people.
in making a difference to their lives.
We, at Cairn India, believe that successful growth can only
Cairn has in the last 15 years of its presence in India made
be based on the principles of sustainability, affordability,
more than 40 discoveries, including Mangala, the biggest
inclusiveness and sensitivity to our environment.
onshore oil discovery in India in the last two decades. By the end of 2011, Cairn India will be contributing more than 20% of
Cairn India is listed on the Bombay and National Stock
India’s domestic crude production.
Exchanges and has a market capitalisation of more than USD 14 billion. We are among the fastest growing Exploration and
This brochure is a statement of our business philosophy and
Production companies in the world with a strong heritage of
outlines the key drivers of our performance as a company
exploration success and a proven track record of fast track
pioneering in the quest for energy and enriching lives.
development and low cost operations. Our foundation is built on a relentless focus on execution, cost consciousness and innovative application of technology. We believe in working towards common objectives with a strong ethos of teamwork.
Rahul Dhir Managing Director & CEO
Stakeholder and community relationships are an integral part of our business. Cairn India’s approach to dealing with these
02
Three out of the seven landmark oil discoveries made in India between 2000 and 2005 were by Cairn and its Joint Venture partners
Delivering Growth through Transformation 03
Cairn India’s Journey Cairn has been exploring for hydrocarbons
The Mangala discovery in Rajasthan in
production. We have a world class
in India for more than 15 years. Today,
2004 was the largest onshore discovery in
resource base and are focused on the
it has a proven track record of making
the country in the past two decades.
delivery of the Rajasthan development as
exploration discoveries and fast tracking
we continue successful production from
them to production. Three out of the seven
The company operates the largest
landmark oil discoveries made in India
producing oil field in the Indian private
between 2000 and 2005 were by Cairn and
sector and has pioneered the use of
its Joint Venture (JV) partners.
cutting-edge technology to extend
our existing assets.
04
Delivering Growth through Transformation 05
Our Journey Since IPO Consistent Delivery of Growth On 9 January 2007, Cairn India Limited was
maintaining low operating costs in
Ensuring the company is well
listed on the Bombay Stock Exchange and
existing producing fields
positioned to take advantage of growth
the National Stock Exchange of India. Cairn
•
Optimising recovery from the Ravva
opportunities in the region
Energy PLC, the parent company holds
and Cambay fields through
•
New acreage in Sri Lanka
a 62.25%* interest while Petronas has a
deployment of state of the art
•
Complete portfolio evaluation
14.9%* interest in Cairn India Limited. This
technology
•
Planning new exploration activities
provided Cairn India with a new platform
•
Developing the world class Mangala
and programmes
for its next stage of growth by:
field in Rajasthan, the largest
onshore hydrocarbon discovery in
India since 1985
Capitalising on the strong development and operational expertise •
Sustained production from and
* As at March 2011
Our Heritage The story began in 1979, when Sir Bill
1996, an Australian-quoted company with
this, along with the other discoveries in
Gammell, our chairman, founded Cairn
interests in South Asia.
Rajasthan, will form the core of the future
Energy. In 1988, the company was listed
developments in India.
on the London Stock Exchange. Sir Bill
Cairn Energy PLC, a FTSE 100 company, was
Gammell became its first Chief Executive
one of the first UK companies to invest in the
Today, South Asia is one of the most
and has held this position for more than
Indian oil and gas sector. Ravva in eastern
exciting investment destinations for the
two decades, overseeing the organisation’s
India was the first offshore oil and gas field to
hydrocarbon sector. Cairn India, along
transformation to one of the largest
be developed, followed by the Lakshmi gas
with its joint venture partners, has invested
independent exploration and production
field in western India, which was discovered
billions of dollars in a variety of projects
companies in Europe. As the Indian oil
in 2000 and commenced production in 2002.
and developments in this region.
and gas market deregulated in the early 1990s, Cairn’s focus turned to this region,
In January 2004, Cairn added the Mangala
acquiring Command Petroleum Ltd in
oil field in Rajasthan to its assets and
06
Delivering Growth through Transformation 07
Our Vision and Core Values Cairn India’s vision of pioneering
to grow collectively in this part of the
livelihoods whilst aiming to safeguard the
energy and enriching lives is built on the
world. Respect for individuals within the
environment.
foundation of our core values of pioneering
organisation, a healthy diversity of cultures
spirit, teamwork, respect and ownership.
and professional experience has helped
For more than a decade Cairn has been
These are embodied in the way we
Cairn to pursue its vision of being a pioneer
undertaking pioneering activities in the
conduct our business and engage with
in the field of energy. Cairn has also
field of energy. Through the core values
our stakeholders.
successfully demonstrated its commitment
of pioneering spirit, teamwork, respect
towards the communities in which it
and ownership we have built a significant
Over the years, innovative thinking and a
operates through responsible actions
hydrocarbon resource base in the country.
can do attitude within teams helped Cairn
that has helped in creating sustainable
08
Discovering energy for growing economies A decade of achievement
• Mangala Field Development Plan (FDP)
Exploration
• More than 40 Hydrocarbon discoveries:
Production
Onshore
• Operates the largest producing oil field in
Offshore
-
Shallow
• Combined field direct Opex of Ravva and CB/OS-2 is
-
Deep
approved within 30 months of discovery
the Indian Private Sector approximately USD 2/barrel of oil equivalent (boe)
Development
• Pioneered use of cutting-edge technologies to extend
• Fast-track development
• Lakshmi gas field discovery in May 2000 and first gas
Sales
• Gas sales contract with public and private buyers
by October 2002
• Ravva, developed from a 3,700 barrels of oil per day
(bopd) field to a 35,000 bopd field in 26 months, then
plateau production of 50,000 bopd for nine years
production life
• Oil sales to four major refineries across India
Delivering Growth through Transformation 09
Cairn is focused on creating value for our stakeholders through exploration and production. We continue to maximise the potential of Rajasthan and recovery from the existing producing assets while identifying new growth opportunities
10
Cairn India is committed to continuing investment for growth and is focused on creating shareholder value by developing its world class resource base in Rajasthan, maximising recovery from the existing resource base and seeking to continue Cairn’s track record of exploration success
Growing our assets low-cost operating base by focusing on
CB-X, a marginal gas field in the transition
oil field life-cycle planning, continuous
zone of the CB/OS-2 block was in
Ravva Field, Krishna-Godavari Basin,
monitoring of operational costs and
production between June 2007 and
Andhra Pradesh
the innovative application of operating
August 2009. The Lakshmi and Gauri fields
The Ravva oil and gas field in the Krishna-
technologies. Ravva completed 15 years
commenced production of oil in addition to
Godavari Basin was developed in
of continuous operations on 28 October
its gas production in 2005.
partnership with ONGC, Videocon and
2009. Originally estimated to produce 101
Ravva Oil, under a production sharing
million barrels of crude oil, Ravva has now
Cairn is the operator of the CB/OS-2 block.
contract (PSC) that runs until 2019.
produced more than 225 million barrels.
The PSC was signed in 1998 with ONGC
Producing Assets
and Tata Petrodyne Limited as partners and
Currently, eight unmanned offshore platforms are being operated. A 225-
Cairn India is confident of the field’s
acre onshore processing facility at
considerable remaining reserve potential
Surasaniyanam processes natural gas
and of further oil production from
The natural gas and crude oil from these
and crude oil from the Ravva field. The
this block. The Company and its JV
fields is processed at an 82-acre onshore
Ravva onshore terminal operates to the
partners have completed a 4D seismic
processing facility at Suvali owned by the
internationally recognised environmental
acquisition campaign, first in India, to
JV partners. The plant is certified to ISO
standard – ISO 14001 – and has the
identify bypassed oil zones and have now
14001 & OSHAS 18001 standards and has
capacity to handle 70,000 barrels of oil
commenced infill drilling.
the capacity to process 150 mmscfd of
runs until 2023.
natural gas and 10,000 bopd of crude oil.
per day (bopd), 95 million standard cubic feet per day (mmscfd) of natural gas and
CB/OS-2, Cambay Basin, Gujarat
The application of advanced geophysical
110,000 barrels per day of injection water.
In 2002, gas production commenced from
tools has helped map thin oil sands which
The terminal also has the capacity to store
the Lakshmi gas field, which is situated in
are beyond normal seismic resolution
one million barrels of crude oil onshore.
Block CB/OS-2 in the Cambay Basin of the
capability. These techniques have
west coast of India in the Gulf of Khambat.
transformed the CB/OS-2 block from a
The Ravva field is one of the most efficient
The Gauri offshore gas field was discovered
predominantly gas field to an oil
fields in the world and has maintained its
in 2001 and came on-stream in 2004.
Delivering Growth through Transformation 11
field through the discovery of an oil leg.
Development Project
Tubing sand screens were used for the
further 300 mmboe or more of Enhanced Oil Recovery (EOR) potential. The MBA
first time in the Cambay Basin as a sand
Rajasthan – Barmer Basin
fields will contribute more than 20% of
control measure. The Cambay asset has
Cairn has developed a good understanding
domestic crude production when they
witnessed the use of several cutting-
of this reservoir through extensive seismic
reach the currently approved plateau rate
edge technologies which have increased
and appraisal work.
of 175,000 bopd.
The Mangala field, which was discovered
The Mangala Field commenced production
Cairn India signed a Term Sheet agreement
in January 2004, is the largest onshore oil
on 29 August 2009 after it was dedicated
to produce Gauri share of GBA (Gas
discovery in India in more than 20 years.
to the nation by the Honourable Prime
Balancing Agreement – for sharing of gas
The Mangala, Bhagyam and Aishwariya
Minister of India, Dr. Manmohan Singh at
from the shared reservoir formation) gas
(MBA) fields have recoverable oil reserves
the Mangala Processing Terminal in Barmer,
through the Hazira facilities in December
and resources of nearly 1 billion barrels,
Rajasthan. Cairn India has embarked on the
2009. The gas production and sales also
which includes proven plus probable (2P)
journey of transformational growth in oil
commenced in the same month. This is a
gross reserves and resources of 694 million
production levels with its Rajasthan fields
first arrangement of its kind in the country.
barrels of oil equivalent (mmboe) with a
commencing production.
throughput at a lower unit cost.
12
It has been recognised that the significant reserves and resources discovered in Rajasthan are ideal candidates for the application of advanced techniques to optimise and increase recoverable volumes. Utilisation and development of these technologies is key element to realise the full potential of the block
Delivering Growth through Transformation 13
Developing the Rajasthan Discoveries Cairn first came to Rajasthan in 1997 with
Work on the development of the Bhagyam
and three observation wells, has been
the belief that the key ingredients for
field, the second largest field in Rajasthan,
drilled, completed and hooked up to the
commercial success were present, but
has commenced. Development drilling
facilities. Water injection and production
it took perseverance and more than a
has started with a total of 19 Bhagyam
phase also commenced in December,
dozen wells to discover the Mangala field,
development wells drilled to date. Crude
2010. This pilot will be used to refine the
followed by Aishwariya, Bhagyam and
oil production from the Bhagyam field is
EOR process and facilities with an aim to
other discoveries. To date, 25 discoveries
expected to commence in H2 CY 2011 and
roll out EOR on a field wide basis. The
have been made in the Rajasthan block.
achieve approved plateau levels by year
current assessment of the EOR resource
end 2011. The sub-surface well results so
base is more than 300 million barrels
far have been as per expectations.
(mmbbls) of incremental recoverable oil
The Mangala, Bhagyam and Aishwariya (MBA) fields in the northern area of the
from the MBA fields alone.
Block are currently under development
Assessment of production impact
with over 125 development wells already
and design optimisation is currently
Barmer Hill
drilled in Mangala. The Mangala field
underway due to increased reserves in the
A pilot hydraulic fracturing programme
was dedicated to the nation on 29 August
Aishwariya field. Production is scheduled
to test the potential of the Barmer Hill
2009. Since then, Mangala production
to commence in H2 CY 2012 subject to JV
Formation is in the final stages of planning
has ramped up to the currently approved
and GoI approval.
and its implementation is subject to
plateau rate of 125,000 bopd.
GoI approval. The pilot programme will Thus, the MBA fields together have
allow evaluation of the appropriate cost
The focused effort on drilling high capacity
the potential to generate peak plateau
effective technology for a fully optimised
horizontal wells in Mangala and the
production of more than 175,000 bopd.
development of this resource base. A
reservoir performance supports higher
declaration of commerciality for the Barmer
plateau levels. Surface and sub-surface
Enhanced Oil Recovery
Hill was submitted to the GoI in March,
facilities are ready to support production of
As a demonstration of our commitment for
2010 and a FDP is under preparation.
150,000 bopd from Mangala, subject to JV
early use of advanced recovery techniques
Optimal recovery techniques utilising large
and Government of India (GoI) approval.
to increase the oil recovery from the world
fracture treatments and potential use of
In addition to Mangala, as per the currently
class MBA fields in Rajasthan, the chemical
multiple staged horizontal well fracs, will
approved FDPs Bhagyam and Aishwariya
EOR pilot trials in the Mangala field started
be demonstrated and refined during this
have the potential to produce 40,000 bopd
in early 2010. The first phase of EOR pilot
and subsequent pilots.
and 10,000 bopd respectively.
consisting of four injectors, one producer
14
Delivering Growth through Transformation 15
Rajasthan Upstream The Rajasthan Field Development Area
Mangala, Bhagyam and Aishwariya fields
design of MPT to preserve water, a scarce
(FDA) consists of three contiguous areas:
and has a nameplate capacity to process
resource in the desert state of Rajasthan,
(i) Development Area 1 - Mangala,
205,000 bopd of crude with scope for
by recycling and reusing water for boiler
Aishwariya, Raageshwari and
further expansion. Trains One, Two
feed, injection purposes and when used as
Saraswati (MARS)
and Three are commissioned and the
power fluid.
(ii) Development Area 2 - Bhagyam
construction of Train Four is underway.
(iii) Development Area 3 - Kameshwari
West.
The gas from the Raageshwari field, Processing crude oil from four trains
located 90 kms away from MPT, is used
requires the MPT to have an extensive
to heat the boilers and, more importantly,
Cairn India and its JV partner ONGC have
water heating, circulating and recycling
to heat the waxy crude along the
an area of 3,111 km2, under long term
system, gas recovery systems, heat and
approximately 670 kms Barmer to Bhogat
contract on the Rajasthan licence spread
power systems and built-in fire and safety
pipeline.
across the districts of Barmer and Jalore.
systems. The infrastructure to and from the MPT involves some 500 kms of intra-
Developing the Barmer to
At peak production, the Mangala,
and inter-field pipelines and 80 kms of
Bhogat Pipeline
Bhagyam and Aishwariya fields together
inter- field roads.
will produce 175,000 barrels of oil per day
Cairn India took on the crude pipeline
(bopd) - which is estimated to account
Steam is the main source of heat to extract
project to overcome the following
for more than 20% of India’s crude oil
and evacuate the Rajasthan crude. The
challenges:
production. Subject to GoI approval and
advantage of steam is that it is an efficient,
•
To reach maximum potential buyers
additional investments, the Rajasthan
pollution-free and a renewable resource.
•
Resolve the flow assurance issues
resource base now provides a basis for
All power requirements of the MPT are
posed by the quality of the crude oil
a vision to produce 240,000 bopd or
met by captive power plants, comprising
•
Minimum effect on the environment
37% more than the currently approved
four 12 MW Steam Turbine Generators
and minimum foot print
peak production, which could ultimately
and three 2 MW Emergency Diesel
•
Build a technically sound and
translate to about 35% of India’s domestic
Generators.
operations friendly evacuation
system
crude oil production. The water to generate steam and flood Mangala Processing Terminal (MPT)
the oil reservoirs to help evacuate the
The Mangala Development Pipeline
crude comes from a saline water aquifer
Project (MDPP) starts at the MPT in
Spread over an area of 1.6 km2, the MPT
at Thumbli, which is 22 kms away from
Barmer and passes through the two states
is designed to process crude from the
MPT. Due care was taken during the
of Rajasthan and Gujarat, eight districts
16
Delivering Growth through Transformation 17
Developing the world’s longest continuously heated and insulated pipeline demonstrates the technical expertise being applied to secure energy from the Rajasthan fields
and travels approximately 670 kms before it
The pipeline crosses all major crude oil
(ROU) under the Petroleum and
reaches the coastal location of Bhogat near
carrier pipelines in the western part of
Mineral Pipelines Act , 1962
Jamnagar on the western coast of India.
India and offers the potential of blending
•
More than 750 crossings of various
the Rajasthan crude with the other crudes
types starting from Railways, National
The MDPP Evacuation system is a 24”
that are carried in the other pipelines. As
and State highways, Rivers, Canals,
crude oil pipeline which uses a Skin Effect
it terminates at the coastal location, the
other roads and other pipelines etc
Heat Management System (SEHMS) to
marine facilities are designed to load the
ensure that the crude oil remains above
crude oil carriers to transport the crude oil
The MPT to Salaya section (approx. 590
the Wax Appearance Temperature (WAT)
to other coastal refineries as well. This way
kms) is now operational along with the final
of 65 C, throughout the pipeline. It has
the pipeline accesses 75% of India’s
delivery infrastructure to each buyer. The
an 8” gas line which feeds gas to all the
refining capacity.
pipeline system has demonstrated safe
o
Above Ground Installations (AGI) located
and efficient operations and is transporting
at approximately 20 kms distance on the
The pipeline project has a few first to its name:
125,000 bopd to various refiners.
pipeline. The AGIs produce the necessary
•
It is the world’s longest continuously
power to keep the pipeline heated to the
heated and insulated pipeline using
Construction work on the Salaya to Bhogat
required temperature. The pipeline has
SEHMS technology
section (approx. 80 kms) pipeline including
36 AGIs and an intermediate pumping
•
For the first time in India an insulation
the Bhogat terminal and marine facility is in
station and terminal at Viramgam. The
plant has been set up especially
progress with completion targeted in
pipeline also extends up to Radhanpur,
for this project by the line pipe
H2 2012.
where a terminal has been constructed to
manufacturer
facilitate the crude oil sales to Indian Oil
•
Engagement with more than 40,000
Corporation Limited through their
land owners and land users while
pipeline network.
obtaining required Right of User
18
Exploring to Discover At present, out of the 10 blocks where
Over the last two years, a full re-evaluation
Southeast India
Cairn India has exploration and appraisal
of the Barmer Basin has been undertaken.
Krishna Godavari Basin
interests, nine blocks are in India and one
All 170 exploration and appraisal wells
The Company holds a strong position
in Sri Lanka. These blocks are located in
were re-examined, new studies were
in the Krishna Godavari basin with both
the Krishna-Godavari Basin, Palar-Pennar
2
started and 2,733 km of 3D seismic data
existing production from the Ravva Field
Basin, Kerala Konkan Basin, Cambay
was re-processed and re-interpreted. Cairn
and prospective acreage in onshore and
Basin, Barmer Basin and the Mannar Basin
India has also acquired over 2.2 km of
offshore blocks. Our commitment to this
offshore Sri Lanka.
cores to help gain a better understanding
basin was further consolidated with the
of the geographical and reservoir
award of the sought after KG-OSN-2009/3
The prospect and lead portfolio being
models. As a result of these studies, the
block in the NELP VIII for which a
developed and matured by Cairn India is
Rajasthan prospect portfolio has increased
Production Sharing Contract was signed on
diversified and comprises a balanced mix
substantially to 250 mmboe recoverable
30 June 2010.
of risk and potential reward.
risked mean prospective resources with an upside potential, equivalent to a most
Ravva (Cairn India 22.5%, Operator)
Northern India
likely in place resource of 2,500 mmboe.
A major review of the block-wide
Rajasthan
Discovering and developing these resources
additional potential is being undertaken.
Barmer Basin - RJ-ON-90/1
will be an important step in realising the full
A review of Contingent Resources was
(Cairn India 70%, Operator)
production potential of Rajasthan.
completed in early 2009, resulting in small
There remains a significant and as yet
but significant additions to the resource
untested prospective resource potential to
Technical evaluation work continues to
base, although further drilling is required
pursue in the Barmer Basin of the
assess existing and new plays in the basin
to monetise these. A second study to
Rajasthan block.
to generate further prospects in Rajasthan.
assess the additional undiscovered
Delivering Growth through Transformation 19
Cairn India is in an exciting period of growth and is pursuing a range of exploration and appraisal programmes in its key Rajasthan acreage and other exploration blocks throughout India and in Sri Lanka. Cairn India pursues a strategy of accessing and applying appropriate leading-edge technologies to ensure it builds competitive advantage in all exploration projects
20
Cairn India holds exploration licences for various geographic areas in eastern, western, northern India and Sri Lanka. These interests provide us opportunities to develop our business in the long term
potential within the field both in untested
as part of the future plan for commercial
Moving beyond: Sri Lanka
deeper horizons and in adjacent structures
development of this discovered oil and
SL 2007-01-001 (Cairn Lanka
is ongoing and is expected to add new
gas resource. The southern area appraisal
100% - a wholly owned subsidiary
exploration prospects. Further evaluation
period was completed in December 2009
of Cairn India)
of the commerciality of these prospects is
with the declaration of commerciality
Cairn Lanka Private Limited, the wholly
underway prior to drilling.
submitted to the Directorate General of
owned subsidiary of Cairn India,
Hydrocarbons (DGH).
commenced its 3D seismic survey in the
KG-ONN-2003/1 (Cairn India 49%,
Mannar Basin in Sri Lanka on 10 December
Operator)
Palar-Pennar Basin
2009 and the data is currently being
Two wells Nagayalanka-1z and Krishna-1
PR-OSN-2004/1 (Cairn India 35%,
processed. The acquisition programme,
were drilled during Q2 FY 2010-11. Oil
Operator)
which was launched by the Honourable
flow at the rate of 75 bopd and gas at the
Following interpretation of 3,100 line km
President of Sri Lanka, Mahinda Rajapaksa,
rate of 0.27 mmscfd were established in
of offshore 2D seismic data, 800 km2 of 3D
fulfilled the commitment of 1450 km2 of 3D
the Nagayalanka-1z well and a discovery
seismic data a geotechnical study and pore
seismic data acquisition. Exploration drilling
declared. Preparations are ongoing for
pressure studies have been completed.
is planned to commence in July 2011.
further exploration and appraisal drilling.
The block is currently under Force
Logistical preparations and detailed studies
Majeure.
are currently ongoing ahead of the drilling
KG-DWN-98/2 (Cairn India 10%, non-
schedule.
Operator. ONGC is the operator)
Kerala-Konkan Basin
The northern area of this PSC is now in an
KK-DWN-2004/1 (Cairn India 40%,
The Mannar basin is an unexplored frontier
appraisal phase following completion of the
ONGC is the operator)
petroleum province with both structural
exploration period. The first of three wells
A 3,840 line km 2D seismic programme
and stratigraphic plays.
to appraise existing discoveries in the block
was completed in 2009 and following
was spudded in Q4 2009. Two further
interpretation of the data, 300 km2 of 3D
wells will be drilled by the end of Q2 2010,
acquisition was completed.
Delivering Growth through Transformations21
Portfolio of Assets in India and Sri Lanka
Rajasthan Block Map
24
Using innovative technologies is a way of life with us. We are ready to face the energy challenges of the future, our focus on technology helps us to stay ahead in an environmentally responsible manner. Cairn India has applied technology and gained significant operational experience in the deserts of Rajasthan, the highly populated plains of Bihar, the shallow waters of Cambay and the deepwaters of the Krishna Godavari and Kerala Konkan basins
Pioneering Technology For more than a decade, Cairn has been
there have been 10 discoveries. Some
exploration activities. The concept of
successfully discovering and bringing to
of the important ones are Annapurna,
under balance perforation using TCP guns
production new oilfields to increase its
Padmavati and Kanakdurga, in depths
was implemented for the first time in India
hydrocarbon resource base through the
ranging from 400 m to 2800 m.
during the first drilling campaign in Ravva
use of latest technologies.
in the year 1996-98. This resulted in high Ravva: At the Ravva field, Cairn and
deliverability wells thereby minimising the
Cairn has established new benchmarks
its JV partners have built a success story
capital expenditure in the field.
with its ability to manage reservoirs and
by putting new technologies into action
maximise recovery to increase the reserve
through sub-surface work, cost effective
At Ravva, new technology such as coiled
bases of the fields it operates.
operations and the implementation of
tubing catenary was implemented on
best reservoir management practices.
location for the first time in South East
By introducing clean technologies,
Three development drilling campaigns
Asia as well as the Middle East. A Drag
streamlining maintenance and improving
were carried out in the last decade to drill
Reducing Agent (DRA) was also applied
recovery rates through innovative
32 development wells and the field has
in the multiphase pipeline that resulted in
applications that are cost effective, Cairn
produced at plateau rates of approximately
enhancing and sustaining the plateau rate.
India has successfully maximised the oil and
50,000 bopd for the last nine years. Cairn
Cairn also introduced Produced Water
gas output from mature and new fields.
has completed the ambitious programme
Re-Injection (PWRI) in an offshore field.
of 4D seismic to access the remaining Cairn India pioneered India’s first
hydrocarbons and infill drilling is to
As part of its continued commitment to
deepwater discovery on the east coast. Of
commence to identify bypassed oil zones.
green technology, Cairn India has installed
the 14 wells drilled by the joint venture in
The innovations at Ravva have set
a solar plant for the remote management
Krishna-Godavari deepwater since 2001,
a benchmark for future fields and
of the well heads located offshore Ravva.
Delivering Growth through Transformation 25
In addition, a 400 watts wind generator
CB/OS-2 block has also witnessed
hydrocarbon resources within the state
has also been installed to lower diesel
cutting-edge technologies in the other well
of Rajasthan with a sustained focus on
consumption on cloudy days. These
services like:
cost and the application of innovative
innovations have helped the ISO 14001 accredited Ravva field to emerge as one of the top shallow water oil developments.
technology. The use of high density 3D seismic surveys has enhanced the
• The plastic plug technique was successfully used for zone isolation in
understanding of the reservoir and helped
one of the Gauri wells for the first time
in precise identification of well locations
Cambay: In the western coast of
in India, which proved to be a cheaper
leading to reduced finding costs.
Gujarat, Cairn has been using advanced
option than other methods for the
geophysical tools like spectral
same purpose.
The use of pad-based drilling coupled with
decomposition and Time Frequency
• Successful well interventions in highly
mobile drilling rigs has allowed a large
Continuous Wavelet Transformation
deviated wells with more than 88
number of wells to be drilled in a short
to map the complexity of the thin play
deviations at 1800 m depths with the
time frame with a reduced environmental
reservoir, which is beyond seismic
help of Slickline catapults and tractors.
footprint and lower infrastructure and
o
resolution. This technique has helped
• For the first time in India, through
drilling costs.
transform CB/OS-2 to develop from a
tubing and sand screens were
predominately gas producing block to an
successfully installed in one of the
The focused effort on drilling of high
oil producing block.
wells in Lakshmi, thus enhancing its
capacity horizontal wells in Mangala and
production.
the reservoir performance from the field supports higher plateau levels.
Expandable Sand Screen (ESS) on the sea bed was installed for the first
Rajasthan: Cairn India and its JV
time in the world, in the Gauri fields.
partner ONGC, continue to develop the
26
Delivering Growth through Transformation 27
People Our Assets Its our people...with unlimited capabilities At Cairn India, we believe that world class
operations in India. The people that Cairn
Cairn India is an equal opportunity
results can be delivered only by world class
employs represent the foundation of this
employer, where practices and policies
people, facilitated by a world class working
multicultural organisation. Over the years,
enable employees to build a strong and
environment.
Cairn has employed some of the brightest
sustainable career path.
minds in the industry and the skills of The company unlocks the potential of its
these people are critical to the success of a
Cairn is committed to fostering an
employees by creating a high performance
dynamic organisation.
entrepreneurial environment for its
culture.
employees. Over time it has built a depth Our people development initiatives are
of knowledge and strong sets of cultural
The HR policies and practices provide an
aimed at building leaders who will take
values. Around 80% of our employees are
enabling work environment that motivates
the organisation forward in line with its
professionally qualified and are led by an
every employee to rise to the challenge of
vision and values. Cairn encourages a team
experienced management team. Their
delivering extraordinary results.
spirit that fosters a focused and motivated
passions for the business, ability to adapt to
working environment, creating a climate
new technology and commercial acumen
Cairn India has developed a strong pool
where employees have an opportunity to
have played a vital role in the success of
of skilled manpower over the years of its
maximise their potential.
our organisation.
28
As an organisation that focuses on sustainable growth, Cairn India is fully aware of its responsibilities during hydrocarbon exploration and production. It is for this reason that Health, Safety and Environmental (HSE) policies receive our highest priority
Highest Priority: Safe Operations Health, Safety and Environment are
•
UK Safety Case approach, which has
•
International HSE standards are
integral to Cairn India’s business
been applied to the CB/OS-2
being applied in the construction of
management systems. The company is
development
the Rajasthan upstream project works
committed to accomplishing excellence in
•
UK Control of Major Accident
and in the Rajasthan-Gujarat
HSE across all its operations, and to protect
Hazards (COMAH) Regulations,
pipeline project
our employees and contractors who come
which are being applied to the
•
The DuPont ‘STOP’ system has
into contact with the physical and natural
Rajasthan Development. All operating
been introduced throughout Cairn
environments in which they work. Cairn
sites are ISO 14001 certified
India operations as a tool to improve
strives to minimise any impacts to the
•
The Rajasthan project successfully
behavioural safety
environment arising out of its activities.
completed forty million man hours
•
Cairn India has in place safety policies
Cairn India has adopted several
without a lost time injury (LTI)
for road transportation, aviation and
international standards, processes and
•
CB/OS-2 and Ravva sites Safety
marine operations
procedures in its management system,
Management Systems are OHSAS
some of which are:
18001 certified
Delivering Growth through Transformation 29
Staff participation is critical for HSE to function effectively. To ensure this, there is a HSE Leadership Team in place. It comprises Cairn India’s senior management, which provides leadership on HSE matters, reviews performance and identifies opportunities for improvements
30
With a five fold increase in production volumes forecast for the next decade, the development work is in full swing
Delivering Growth through Transformation 31
Competitive Advantage Low cost operating capability: Cairn
management and achieving recovery
•
4D seismic surveys in Ravva to tap
India has over the years demonstrated
of crude over an extended plateau. In
further potential of the field
that it is capable of operating its assets
the Ravva field in the KG Basin, Cairn
on a very cost effective basis. The direct
increased crude oil production from a level
Nurturing Skills: Over the years, Cairn
operating cost of its Ravva block is in the
of 3,700 bopd in 1994 to 35,000 bopd in
India has grown significantly to become
range of USD 2 per barrel, amongst one
26 months and ultimately to the plateau of
a more than USD 14 billion company. In
of the lowest in the world. This allows
50,000 bopd in 1999. In 2009, the Ravva
the process, it has strengthened its core
production to be profitable even at USD 9 -
block completed 15 years of production
capability with a blend of experienced
12 per barrel crude prices.
and is still going strong.
and young professionals from various backgrounds. The employees have
Project Execution: Cairn India has
Success through technology: Cairn
a passion for the business and in a
demonstrated world-class and skilled
India has been a leader in the application
fast-moving environment they adapt
project execution with the development
of latest technologies to enhance the
to changes, using their technical and
of Rajasthan upstream facilities and
resource base and in finding solutions for
commercial acumen, managing risk and
construction of the world’s longest
overcoming different technical issues.
uncertainty and making ‘brave’ decisions in the pursuit of our vision. High corporate
insulated and heated pipeline. Cairn is commissioning India’s only heated Single
•
Executing the world’s longest
governance standards, coupled with
Buoy Mooring (SBM) facility at Gujarat
insulated and continuously heated
professional management, distinguish
Coast for handling Rajasthan crude oil
crude oil pipeline from Barmer in
Cairn India from its peers.
and contributing more than 20% to India’s
Rajasthan to Bhogat on the coast
domestic production. As the operator of
of Gujarat.
Partnership: Working with local
the Lakshmi field in the Cambay Basin,
•
Horizontal well drilling to produce
communities, Central Government, State
Cairn commenced natural gas production
from sheet sands - oil flow rate
Governments and JV partners, Cairn India
in less than 30 months following discovery.
>11,500 bopd achieved from the first
has developed an in-depth understanding
The Rajasthan discovery to first oil was
horizontal producer well – a record in
of the regulatory environment and has laid
done in five years; another enviable
the country
the foundations for strong relationships.
achievement.
•
Application of Enhanced Oil Recovery We strive to create value for our
technology in Rajasthan, pioneered
shareholders through strong corporate
Nurturing Resources: Cairn India has a
in using the technique in the
governance and business ethics.
proven track record of prudent reservoir
initial phases of field life
32
Producing Hydrocarbons Responsibly Corporate Social Responsibility: Making a difference through social innovation Our Vision, values and mission Cairn India is committed to the highest standards of Corporate Social Responsibility (CSR). We are committed to creating value through leadership in corporate social responsibility. It is our conviction that continuous business growth, sustainable communities and the creation of value for our stakeholders go hand-in-hand. Cairn India has made good progress in both developing and implementing its approach to managing the CSR challenges facing
Respect
RESPONSIBILITY
People are Cairn India’s key asset and the
Cairn India is operating in many areas that
attitude of the Cairn team is critical to its
face economic, social and environmental
business culture. Cairn’s entrepreneurial
challenges. It has the responsibility to
spirit is underpinned by a depth of
understand these CSR challenges, identify
knowledge and a strong set of cultural
the potential impact of its activities and,
core values, including integrity, social and
through engaging with stakeholders, look
environmental responsibility, teamwork,
for opportunities for mutual benefit.
nurturing of individual creativity, risk management and developing alliances with key partners.
Relationships
the business. Specific attention has been
Relationships are the key to developing
placed on the emerging CSR issues such
any business and Cairn India’s success
as assessing and managing biodiversity
in the region for more than a decade
risks, security, human rights and the
would not have been possible without
potential impact of climate change on doing
the consistent support of all stakeholders,
business. We have found that the use of a
from Governments, regulators and JV
‘rights aware’ approach has helped us to
partners to the people living near our sites.
address some of the more complex issues
The level of support and understanding
that the Company faces and we are working
on the ground is something we have
to raise awareness about this approach.
worked hard to bring about in our business
Cairn India proactively engages with
development activities and we are proud
communities and stakeholders to arrive
of what we have achieved – and continue
at a collective vision and joint
to achieve – wherever we are operational.
implementation plan. Our goal is to make a positive social impact in every area in which we operate. Our vision encapsulates Corporate Social Responsibility in the 3 R’s.
Delivering Growth through Transformation 33
34
Cairn India received the TERI Corporate Award for Social Responsibility 2008 and the Golden Peacock Award for Corporate Social Responsibility 2011 in recognition of its community engagement initiatives. These awards recognise corporate leadership in environmental management and good corporate citizenship across the country.
At Cairn we believe in sustainable
set forward some objectives we would like to
• Demonstrating leadership in corporate
development, which we interpret as
achieve as a responsible corporate citizen.
growing our business in a socially and
These are:
These objectives are further segregated
environmentally responsible way while
• Proactive management of stakeholder
into strategic objective, external and
meeting the legitimate interests of our
expectations to obtain and maintain a
internal, primarily for the purpose of
stakeholders. We also believe in taking
‘Social License to Operate’
greater focus and maintaining a balance
an active role in empowering local
• Partnering with the community for
between the sub-goals of the various
communities to achieve their ambitions.
stakeholders and Cairn.
To achieve the collective vision of Cairn,
• Achieving a positive perception of
Strategic
Cairn in areas of operation
The strategic objectives are designed to establish best practices in the field of CSR and to charter a new path for others to follow. Cairn India intends to:
External
its stakeholders and communities, we have
The external objectives are aimed towards positive engagement with the external stakeholders, to gain their support for the CSR activities and develop a vision based on reasonable expectations and needs of the external stakeholders. These external objectives are aimed towards:
Internal
Our Objectives
The internal objectives are directed towards seeking active participation of internal stakeholders, namely employees, investors and supply chain members. The internal objectives are aimed towards:
socio-economic development
citizenship
•
Establish thought leadership through supporting pioneering initiatives towards progressive social change
•
Explore new models for future business
•
Enhance communication and have strategic partnerships for greater impact and leverage
• • • •
Positive engagement with stakeholders for enabling ease of business activities - a social license to operate – and risk mitigation and reputation management Addressing expectations of key stakeholders through socio-economic development Overall development of communities and improvement of social infrastructure Following compliance and standards
• •
Creating wider ownership, participation and spokespersons for CSR Reputation enhancement with internal stakeholders – attracting and retaining best talent
Delivering Growth through Transformation 35
Economic Development
STAKEHOLDERS
Four thematic areas
PRIMARY Land contributors Local community
Health
We believe that building lasting
1
relationships needs transparency and involvement of all stakeholders which leads to mutual trust, social license to operate and fostering partnership with our communities, joint venture partners, governments and regulators. Seeking win-win relationships
2
with all our stakeholders is one of our guiding principles and has always helped
• • •
Effective communication of strategy and performance Good corporate governance and risk/ opportunity management Climate change strategy
• • •
Award of exploration permits Granting Operational Permits Compliance monitoring
• •
Clear policies and principles Partnerships for progress
•
Partnerships for conservation of the environment Community development projects
•
us to understand each other’s needs and to
6
work together for everyone’s growth.
2
1
stitutions Gove ic In rnm 8 adem en c t A
7
often only be developed in conjunction with
3
those possessing specific understanding of the desired objectives which includes private sector companies, as well as non-
4
profit research institutes, universities, and government bodies. Cairn CSR forges
programmes aimed at improving the social milieu. The list below is a showcase of some of our partnerships and programmes taken up so far.
•
Adherence to global standards
• •
Direct interaction for feedback and performance reporting Commercial relationship
• • •
Competitive pay Challenging, high quality work Opportunity for development
•
Continuing professional development for all employees Consultation on organisational initiatives
•
different levels of partnership looking at the local needs and delivering high end
uppliers C
nit ies
Cairn believe that requisite knowledge can
5
needed to foster new innovations. We at
6
organisation to develop all the capabilities
Co nt
Alliances - It is increasingly difficult for any
yees In
the area.
STAKEHOLDERS
vesto rs
be a torch bearer for other similar activities in
sp a
4
development models which have proved to
3
lo Emp
and implement innovative and acceptable
Commercial relationships Meetings Training and capacity building
er s
communities and key influencers to plan
• • •
r tn
d An
administration officials, as well as the
To be treated fairly and honestly Long term relationships Opportunities for growth
NGOS B ators u si gul ne Re s
o mm u
We regularly interact with district
TERTIARY Local NGOs Regional NGOs Media
• • •
s and rs to
Education
SECONDARY Panchayat District Administration Local Industries Regulatory Authorities Political Representatives Academic Institutions
c ra
Infrastructure
5
• • •
Responsible investment Legal compliance Fair returns
• •
Meetings with investment analysts IFC audit and annual monitoring report to IFC Participation in surveys for investment analysts Regular reporting
• •
7
8
• • •
Good neighbours Employment opportunities Community development and welfare
• • •
Public consultations Grievance mitigation Community investment
• • •
Preparing business leaders of tomorrow Research Partnership
• •
Developing and teaching Cairn India Case studies Research on impact in the creation of sustainable social, environmental and economic value. Partnership for implementation of the projects
•
Key interest and expectations Engagement
36
Partners
Flagship programmes
International Finance Corporation
Cairn-IFC Linkage Programme, which was for 3 years, is now being continued by Cairn
(IFC)
independently. The programme has three components i) Livelihoods promotion through the establishment of an Enterprise Centre, ii) Child and Maternal Health Initiatives iii) Dairy Development
HelpAge India
Two Mobile health Vans are operational in Barmer District covering more than 60 villages. Health awareness campaigns organised in six districts of Gujarat along the pipeline route.
Room to Read India Trust
Set up 40 libraries in Barmer District and 25 libraries in rural areas of Gujarat.
Reuters
Connecting more than 10,000 farmers through mobile based SMS service for providing agri inputs and advisory.
Multi Commodity Exchange (MCX)
Gramin Suvidha Kendra (GSK) an innovative partnership model with Department of Post, Government of India leveraging rural Post offices to provide agri inputs to Farmers across pipeline.