Cairn India shares rally as ONGC board approves EOR in Rajasthan

NEW DELHI: Cairn India rallied over 1 per cent on Friday in rangebound markets after state-owned Oil and Natural Gas Corp ( ONGC) board approved a $560 million project for enhancing oil recovery ( EOR) at the prolific Rajasthan oilfields.

At 10:20 a.m.; Cairn India was trading 1.2 per cent higher at Rs 323. It has hit a low of Rs 317.95 and a high of Rs 323.50 in trade today.

"Our board earlier this week approved the Enhanced Oil Recovery (EOR) project for Rajasthan fields," PTI report said quoting ONGC Chairman and Managing Director Sudhir Vasudeva.

Cairn India, which owns 70 per cent of the fields, had in June last year submitted a draft EOR plan for the Mangala oilfield, the largest among the 26 oil and gas find it has made in the Barmer district block.

ONGC, which holds the remaining 30 per cent interest in the block, did extensive studies before approving of the EOR investment plan.

Vasudeva said the investment will be about $560 million which will be shared between Cairn and ONGC in 70:30 ratio. The funds are for drilling additional wells and other works, he said.

After ONGC approval, the proposal will now go to the block oversight panel, called the Management Committee headed by oil regulator DGH.

"Cairn-ONGC joint venture this fiscal will drill 48 infill wells. These wells at a later stage will also be used for EOR which may include chemical intervention to sustain the plateau rates for longer times," said the PTI report.