Cairn India said on Thursday that it can raise crude oil production from its prolific Rajasthan fields by over 70 per cent to 300,000 barrels per day or 15 million tonnes a year if government gives timely investment and other approvals.
Cairn India Managing Director & CEO, Mr Rahul Dhir, said over 3.1 billion barrels remain to be discovered in the Rajasthan block that currently produces just over 175,000 bpd.
“Extensive technical studies have highlighted over 3.1 billion barrels of oil equivalent (bn boe) in exploration potential. This, along with the 4.2 bn boe of discovered oil in—place supports our vision of producing 300,000 bpd,” he said in the company’s annual report released today.
Company Chairman, Mr Navin Agarwal, said production potential of 300,000 bpd was “subject to further investments and approvals from our joint venture partner, the Oil and Natural Gas Corporation (ONGC) and the Government of India.”
Mr Agarwal, in his first year as Chairman of Cairn India, said despite the current economic uncertainties, the outlook for oil price remains good and “we are preserving our investment trajectory.”
Billionaire Anil Agarwal led mining group Vedanta Resources last year bought majority stake in Cairn India from its British promoters, Cairn Energy plc. Mr Anil Agarwal has not taken a board position in Cairn India and has instead appointed his brother Mr Navin to head the firm.
“With the much needed correct alignment between the company on the one hand, and its Rajasthan JV partner, ONGC, and the Ministry of Petroleum and Natural Gas, I am confident that more will happen in the years to come,” Mr Dhir said.
“Just as I am confident that the new majority shareholder, the Vedanta Group, will do all that is necessary to accelerate growth, seek new assets, develop greater exploration potential, and create an even more robust foundation for an enterprise that the country can, and should, be proud of,” he said.
Cairn India currently produces just over 175,000 bpd or 8.75 million tonnes a year from Mangala and Bhagyam oilfields in the Barmer block in Rajasthan. It has permission to raise output to 235,000 bpd (11.75 million tons) from Mangala, Bhagyam and Aishwariya or MBA fields.
It currently produces 150,000 bpd from Mangala and about 25,000 bpd from Bhagyam field. Bhagyam had an approved peak of 40,000 bpd, but the field has under performed and there was a need to drill more wells.
The company has secured an approval to raise the peak output from Bhagyam to 60,000 bpd, while that of Aishwariya, the third biggest oil field in the Rajasthan block, to 25,000 bpd from previously stated 10,000 bpd.
With the revised peak, the three fields should produce 235,000 bpd by next year.