If Oilex is able to achieve its potential — its first field is giving it 0.5-1 mmscfd of gas versus 0.6 in the third well of Marcellus — this will mean a big boost for India’s potential oil/gas reserves in ‘tight’ rock formation areas like the Gulf of Cambay and the northeast and, to a certain extent, in the KG onshore area.
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Conventional gas wells can recover around 80-90% of resource, but the comparable number for ‘tight’ formations can be as low as 8-10% even after fracking, which is essentially pumping in water at high pressure to fracture the earth to ensure the gas flows into the well at higher velocity.
While the Cambay Basin is known to be rich in oil/gas, no single well has given enough oil/gas for it to be considered a big discovery. Oilex hopes to change that and get a large and sustained flow with its horizontal wells and multi-stage fracking. The company has successfully completed 8 fracs in four stages. “Finding gas is not the issue in Cambay,” says Oilex vice-chairman Sundeep Bhandari. Who was part of the original team that discovered oil at Cairn India. “What is important is to be able to get a sustained flow, and that is what we hope to achieve.”
A US Energy Department estimate last year had put India’s proven natural gas reserves at 44 trillion cubic feet along with another 96 trillion cubic feet of unproven wet shale gas technically recoverable resources.
According to data on Oilex’s website, based on the tests done so far, there is 0.5 tcf of recoverable gas in its 160 sq km acreage (in oil jargon, this is called the 2C estimate of ‘unrisked contingent resources’ ) — the 2C estimates of ‘unrisked prospective resource’ are double. “Delivering Cambay-77H with its proof of concept objectives is now almost complete,” Oilex managing director Ron Miller said in a statement.
Oilex bought a 30% stake in the Cambay Field from GSPC and Niko Resources in 2005 but has since bought an additional 15% from Niko.
The company has gone through a price-discovery process for its gas on a best-endeavour basis to buyers in Gujarat, and has asked the petroleum ministry for necessary clearances.