Essar Oil has decided to invest close to 30 million dollars in exploration and development of its Rajasthan oil and gas block.

Following an oil discovery with Nanuwala-1 in the Bikaner-Nagaur basin, Essar Oil plans a second wildcat near Raisinghnagar in Sri Ganganagar district of Rajasthan, Essar Oil's executive director (exploration and production) SR Agrawal said here. "We are planning drilling of second exploration well as part of the third phase of exploration in exploration block RJ-ON-90/5," he said, adding Essar Oil is planning 15-20 development wells over two years to develop reserves that could be as large as 150 million barrels.

Essar Oil had signed a production-sharing contract for two blocks in 1996 with the Indian government and Oil India Ltd. Essar Oil, the operator, has 75 per cent and Polish Oil and Gas Co holds 25 per cent of the contract.

Mr Agrawal said the Nanuwala-1 well showed very encouraging results and briefly flowed good quality 35 degree gravity oil similar in quality to that of Mumbai High.

The Nanuwala structure has an areal extent of 12 square kms and estimates of initial oil, based on the results of the first well, are placed at 50 to 60 million barrels. "Location of the second well is under finalisation amongst the partners including OIL who is the licensee for the block," Mr Agrawal added.

Essar Oil had signed production-sharing contracts for two blocks RJ-ON-90/4 and RJ-ON-90/5 in 1996 with government of India and OIL as licensee of these two blocks. As part of the first phase of exploration around 1400 line kilometers of two-dimensional seismic data was acquired by the consortium using the latest seismic acquisition equipment over both these blocks.