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Vedanta's Barmer block: 20% ROI at $40.bbl but will it be able to repeat the magic elsehwere?
May 10: Vedanta's Barmer project is a prime example of how Indian onland assets can provide fantastic returns on investments
8The company nearly $2 billion capex in the next two to three years is based on a 20% return on investment at a Brent price of $40/bbl
8The incremental peak production from the Barmer projects is expected at 200 kboepd wherein the enhanced oil recovery (from Bhagyam, Aishwarya) is likely to be 127 kboepd, tight oil & gas projects in Rajasthan at 45 kboepd while other projects (Mangala Infill, liquid handling upgrade) are expected to contribute 28 kboepd.
8The ultimate recovery is estimated to be ~375 mmboe.
8Going forward, the management guided production volumes of 220-250 kboepd for FY19E and 275-320 kboepd for FY20E.
8A lot of free cash flow is going to be generated as a result
8It is therefore understandable that Vendanta is an aggressive bidder in the OLAP round. It is working on the fond hope that it will find a Barmer field among India's other sedimentary basins
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