Japanese research and drill ship in multimillion dollar drilling campaign for Cairn India
LBR,Monday 22 August 2011
Drilling for oil offshore is not for the fainthearted. A single well offshore, using the best available technology to increase the chance of a discovery, could cost as much as $150 million. The deep sea drilling vessel Chikyu, contracted by Cairn India, has started drilling for oil off Sri Lanka’s North Western coast on a block secured by the company for exploration.
The Japanese fifth generation drill ship has been contracted to drill three wells in the Gulf of Mannar. Chikyu, designed as a research vessel, is capable of drilling up to 7,000 meters in to the sea floor where geologists will seek hydrocarbon deposits, which indicate the presence of oil and gas.
Even if hydrocarbon deposits are discovered, commercial oil production is at least six years away. A hydrocarbon discovery would lead to a long process of appraisal and development where Cairn geologists will define the field size of the discovery, characterise the reservoir to understand how best to get the oil and gas out and make prepare a field development plan.
Production wells will follow which will aim to extract as much of the oil as possible at minimum cost. Even in the best fields not more than 20% of the deposit is ever extracted.
Prospecting in the Mannar Basin
The Gulf of Mannar has seen numerous attempts at oil discovery by gathering seismic 2D data and drilling
French firm Compaigne General de Geophysique collected approximately 420 km of onshore and 75 km of offshore seismic data on behalf of the Ceylon Petroleum Corporation.
Soviets spudded Pesalai 1 on the Mannar Island
Encouraged by this in Pesalai 1, the Soviets drilled two more wells nearby -- Pesalai 2 and Pesalai 3, but both failed to encounter significant reservoir rocks or a trap
CPC engaged Pexamin Pacific as a consultant to promote exploration in the Cauvery Basin.
Western Geophysical recorded 2D seismic data around the island including the Palk Strait and the Gulf of Mannar. Subsequently, Pexamin Pacific signed a contract with CPC for an offshore exploration block. Marathon Petroleum farmed into Pexamin's interest and drilled two exploratory wells, Palk Bay-1 and Delft-1 in the Cauvery Basin, both failed. There was no drilling in the Gulf of Mannar.
Cities Services acquired interests in the Cauvery and the Mannar basins and collected seismic data. The same year Cities Services drilled Pearl-1, located on the northeast shelf of the Gulf of Mannar. This well was drilled to a total depth of 3050 meters with no oil and gas shows.
A tripartite agreement between Phoenix Canada Oil Company, Petro-Canada and CPC, Petro-Canada acquired 2D seismic data in the Mannar Basin. This is the first comprehensive seismic programme in the Mannar Basin. However, no further work was done and by 1984 petroleum exploration work in offshore Sri Lanka came to a halt and remained dormant till 2001.
TGS NOPEC, a Norwegian seismic contractor approached CPC to undertake a speculative seismic program in the Mannar Basin and a detailed interpretation report was produced by Newsouth Global in 2002. The report highlighted the petroleum potential of the Mannar Basin.
Petroleum Resources Development Secretariat launched the Mannar Basin Licensing Round. In 2008 the government signed a Petroleum Resources Agreement with Cairn Lanka marking the beginning of petroleum exploration in Sri Lanka after 25 years.
Why there may be undiscovered oil
No commercial hydrocarbons were found in any of the drilling attempts in the Mannar basin but companies did encounter source-rock. Source-rocks contain organic matter and its presence is crucial for hydrocarbon formation. TOC (Total Organic Carbon) is a measure of how much organic matter, that is dead animals and plants, are in the source rocks. Some of the best source rock has 2-3% TOC. However the source rock discoveries in the Gulf of Mannar in earlier drilling show almost 7% TOC.