PY-3 re-development offshore India under review

Production from the PY-3 oil field in the Cauvery basin off eastern India will likely remain around 3,400 b/d for the rest of this year, according to operator Hardy Oil & Gas.

Offshore staff

LONDON -- Production from the PY-3 oil field in the Cauvery basin off eastern India will likely remain around 3,400 b/d for the rest of this year, according to operator Hardy Oil & Gas.

The field underwent a prolonged shut-in last year due to unscheduled repair and maintenance of the offshore mooring facility. Normal service was finally restored on Jan. 24 this year.

However, Hardy says there will likely be further downtime during the monsoon season in November and December.

The partners are working on a full field redevelopment plan to enhance production and ultimate recovery from PY-3, via additional wells and artificial lift. The current proposal is to drill two more lateral production wells and upgrade the facilities to include gas compression for gas lift and sales gas evacuation, although timing has not been finalized.

PY-3 is 80 km (49.7 mi) south of Pondicherry in water depths between 40 m and 450 m (131-1,476 ft). The field was developed initially with floating production facilities and subsea wellheads, a first at the time for an offshore field in India. Current facilities comprise the floating production unit Tahara and the 65,000 dwt tanker Endeavor, which serves as a floating storage and offloading unit. Four subsea wells are tied back to Tahara, including one currently acitve, naturally flowing producer and two water injection wells.

Hardy also holds a 75% operating interest in offshore block CY-OS/2 on the south east coast of India, in the same basin where gas was discovered in January 2007. The exploration period for the block ended the following March, and a request was made to extend the block for appraisal and declaration of commerciality of the non-associated natural gas (NANG) discovery until January 2012, in accordance with the provisions of the production sharing contract (PSC).

The company says it has initiated a formal dispute resolution process with the appointment of three arbitrators in an attempt to push through the requested extension. The preliminary hearing by the arbitral tribunal should start soon.

CY-OS/2 block is in the northern part of the Cauvery basin immediately offshore from Pondicherry, and covers an area of around 859 sq km (331 sq mi). The northern area of the license includes the Ganesha (Fan-A1) non-associated gas discovery.

The southern area is adjacent to the PY-3 field, while the outside operated and producing PY-1 gas field lies within the southern part of the acreage. PY-3 and PY-1 both are within the CY-OS/2 license but have been ring-fenced, each with a separate PSC.

08/19/2010

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