Cairn India’s focus for the next year will continue to be on the Rajasthan oil fields, which currently constitute more than 20 per cent of the country’s oil production with an aspirational target of hitting an output of 300,000 barrels of oil daily.
Besides, working out an ambitious drilling programme for the Rajasthan oil fields, the company also wants to re-explore the surrendered area of the block. In other words, sitting on cash of $3.07 billion, Cairn is looking at focusing on its existing profile of 10 blocks, including two overseas.
“Commensurate with the development and exploration activity across the existing portfolio, we plan for a net capital investment of $3 billion through fiscal 2015-16,” said P. Elango, Whole-Time Director and CEO Cairn India.
It has applied to the Government seeking permission to explore that area of the block, which along with its joint venture partner in the block, ONGC, have relinquished according to the exploration norms, Elango said.
He, however, did not disclose what would be the potential resource base of the surrendered area.
The logic behind wanting to re-explore the area is that at the time of surrendering, the prolific nature of the block was not known.
Almost two-third area of Rajasthan block —RJ-ONN 90/1 — has been relinquished.
More crude oil would mean reducing dependence on import. Following a comprehensive review, the Rajasthan block’s resource potential was estimated at 7.3 billion barrels of oil equivalent (oil and gas) gross in-place from the current area, up from 3.1 billion barrel of oil equivalent.
At present, the joint venture produces over 175,000 barrels of oil a day from the Rajasthan block and wants to end the fiscal 2013-14 at a production rate of 200,000-215,000 barrels of oil a day.
As regards what will be the impact of drop in crude oil prices on Cairn, Elango said the company does not speculate on pricing.
But, for this fiscal, the company for its Rajasthan crude has given guidance of a discount of $8-$13 a barrel on Brent.
richa.mishra@thehindu.co.in