Month: September 2008

Cairn India has hired two custom-made drilling rigs from Weatherford International, built by NOV, Houston, Texas, especially for Cairn to assist it in the process of extracting oil in Barmer in Rajasthan. The cost of hiring is estimated at $86 million.

The first rig has already reached the Haldia port and the second is expected to reach Mundra port today.

These rigs, which are highly automated, require very less human intervention and are designed to move rapidly from slot to slot on a pad location and also in between the pad locations. It is from these slots that the wells will be drilled.

The Barmer field is expected to produce 175,000 barrels per day of oil equivalent by 2010. The oil reserves discovered in 2004, is estimated to contain 3.7 billion barrels of oil equivalent, of which one billion is extractable.

Punj Lloyd Upstream, a subsidiary of Punj Lloyd Ltd. hasi nformed us that the company has received a Letter of Intent for a contract worth USD 42 million in Libya for deploying two onshore rigs.

It said,

The contract requires drilling exploratory wells in the Gialo oilfield of the prolific Sirte Basin for Waha Oil Company, a Joint Venture between State-owned National Oil Company and Conoco Phillips, Amerada Hess, and Marathon Corporation of the United States. Waha Oil Company is the second largest crude oil producer in Libya. Punj Lloyd is already present in Libya through a pipeline project for Sirte Oil Company.

Last week apart from raising interest rates on Foreign Currency Deposits, the RBI also took a some more measures. Permitting back to access the Liquidity Adjustment Facility (LAF) to the extent of 1% of net demand and time liabilities which amounts to an indirect reduction in the SLR and conducting the LAF twice daily. Over the week, the RBI injected liquidity to the tune of Rs 655bn.

RBI has sufficient ammunition to minimize the impact of the financial turmoil on the real economy. Tools include – The un-wind of the market stabilization bonds where the o/s amount is currently Rs1.8trillion. Domestic savings, which are currently at 34.8% of GDP is an additional cushion of liquidity.

India is not insulated from the current turmoil. However, the direct impact is limited and would depend on timely policy response in areas such as easing capital account norms and reduction in SLR/CRR to ensure that adequate credit is available for the real economy.