An economic analysis of the Mangala EOR project has been carried out and the project is found to be viable with an IRR of 39.21%.
8In fact, an economic analysis of all the four major fields together -- Mangala, Aishwariya, Raageshwari and Saraswati (better known as MARS) -- in the Rajasthan block was carried out. The pipeline cost was apportioned accordingly on the basis of the ratio of the revised total production profiles.
8Based on the various assumptions and cash flow projections made, the NPV in both cases -- MARS standalone and with the proposed EOR -- turned out to be positive.
8Considering the present framework of fiscal terms and conditions with royalty becoming cost recoverable, the project has been found to be robust and financially viable even for ONGC.
8ONGC has independently done a viability exercise. The results of the economics for ONGC`s share of 30% (Cairn holds the rest of the equity) upto PSC expiry period of May 2020 shows that with the implementation of the EOR schemes, considering a 14% discount rate, the NPV for the revised FDP for the Mangala field, by including the EOR project, works out to a staggering $1,558.28 million, providing an IRR of 39.21%. The total FDP cost for the Mangla project, including the EOR plan, is $2,969.88 million
8The project has been evaluated by Deloitte, which has concluded that the polymer flood EOR FDP is viable and therefore recommended for investment.
8Comment: Given that the money is good, Cairn, along with ONGC, must ensure that the environmental damage is limited and workers are well protected. For otherwise the cost is going really very high.
For more details visit indianpetroplus.com
8In fact, an economic analysis of all the four major fields together -- Mangala, Aishwariya, Raageshwari and Saraswati (better known as MARS) -- in the Rajasthan block was carried out. The pipeline cost was apportioned accordingly on the basis of the ratio of the revised total production profiles.
8Based on the various assumptions and cash flow projections made, the NPV in both cases -- MARS standalone and with the proposed EOR -- turned out to be positive.
8Considering the present framework of fiscal terms and conditions with royalty becoming cost recoverable, the project has been found to be robust and financially viable even for ONGC.
8ONGC has independently done a viability exercise. The results of the economics for ONGC`s share of 30% (Cairn holds the rest of the equity) upto PSC expiry period of May 2020 shows that with the implementation of the EOR schemes, considering a 14% discount rate, the NPV for the revised FDP for the Mangala field, by including the EOR project, works out to a staggering $1,558.28 million, providing an IRR of 39.21%. The total FDP cost for the Mangla project, including the EOR plan, is $2,969.88 million
8The project has been evaluated by Deloitte, which has concluded that the polymer flood EOR FDP is viable and therefore recommended for investment.
8Comment: Given that the money is good, Cairn, along with ONGC, must ensure that the environmental damage is limited and workers are well protected. For otherwise the cost is going really very high.
For more details visit indianpetroplus.com
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