Vedanta group company Cairn India on Saturday said it would invest around $2 billion in the next two years to develop its Barmer block in Rajasthan.
“In the next couple of years we are looking at around $2 billion investment. In the next five years, we are looking to drill at least 500 wells a year. The resource base allows production of 300,000 bpd,” said P. Elango, member of the board, Cairn India.
Cairn India, promoted by London-based billionaire Anil Agarwal, said the exit production rate for 2013-14 is expected to be 200,000-215,000 bpd. The block is jointly held by Cairn India, with 70 per cent stake, and the operator and public sector explorer, ONGC, which holds the remaining 30 per cent.
In the long run, output from the Barmer asset may go up to 500,000 bpd and to drill that much oil nearly Rs 10,000 crore of investments may be poured in, said Anil Agarwal, Executive Chairman, Vedanta Resources.
NEW GAS & CRUDE SALES
Cairn India and its public sector partner ONGC on Saturday announced commercial sale of natural gas and started output from one more field (Aishwariya) from the Barmer block in Rajasthan.
“Initial commercial volumes will be about 5 mmscf per day,” Cairn said in a statement. Elango said the Government would nominate buyers for natural gas from the Barmer block.
Petroleum Ministry M. Veeraapa Moily said the gas would be sold at the prevailing price of the region, which is around $5 per mmBtu.
The block produces about 30 mmscf of gas per day from the Raageshwari deep gas field and the Mangala and Bhagyam fields. The gas produced along with crude oil is used to fire its 48 MW captive power station at its Mangala Processing Terminal.
Compared with other producing gas fields such as the Reliance Industries-operated Krishna Godavari Basin D6 block and the Panna-Mukta-Tapti fields, the quantity from the Raageshwari gas fields in Cairn India-ONGC’s Barmer block is small.
In addition, Cairn India also announced crude oil production from the Aishwariya field in the Barmer block. This field — RJ-ON-90/1 -- is the third largest discovery in the block.
At its peak, Aishwariya is expected to add 10,000 barrels of oil per day (bpd) to the current output of 175,000 barrels from the Mangala, Saraswati and Bhagyam fields in the block.
The oil output from the Rajasthan block contributes to over 20 per cent of the nation’s oil production. India meets close to 80 per cent of its crude oil requirement through imports.
The block has contributed Rs 19,000 crore (cumulative) to the exchequer in the form of royalty and levies. The field, since it started production in August 2009, has replaced imports of about Rs 50,000 crore.
“Everyday, Cairn India pays royalty of Rs 15 crore to Rajasthan,” Elango said.
INFRASTRUCTURE
Elango said the explorer is in discussion with the Rajasthan Government to develop gas infrastructure in the State. “We have formally submitted our expression of interest (EoI). The State has a joint venture with GAIL. The new gas can push the project.
(Business Line is visiting Barmer on the invitation of Cairn India . )