Vedanta To Invest $2.3 Billion In Oil & Gas
Vedanta Ltd. has said it will be investing $2.3 billion towards capital expenditure on its oil and gas activities in the ‘near term’ to increase the reserve base by around 375 million barrels.
Vedanta aims to increase production from 200,000 barrels of oil equivalent per day to 300,000 barrel oil equivalent per day over the next few years, according to its latest annual report.
“In the near term, we are investing a gross capital expenditure of $2.3 billion to increase our resource and reserve base by around 375 million barrels. Our rich project portfolio comprises enhanced oil recovery projects, tight oil and gas projects and exploration prospects,” the report said.
“As well as boosting production, this investment will generate sustainable employment opportunities, directly and indirectly and bring cutting edge solutions to community needs,” the metals and mining giant said.
For the financial year 2019, Vedanta expects to achieve a significant growth in production with total volumes in the range of 220-250 thousand barrels of oil equivalent per day through executing growth projects, with operating expenditure of sub-$7 per barrel of equivalent.
As the largest private sector producer of crude oil in India, and with a strong track record and growth pipeline in exploration and development, Vedanta is well positioned to benefit from the government’s desire to boost domestic production and to leverage India’s oil and gas resource potential, it said.
“We estimate the net capital expenditure commitment at $600-800 million (for the financial year 2019),” it said.
Kuldip Kaura, chief executive officer of Vedanta, said the company’s vision was to contribute 50 percent of the country’s domestic crude oil production by increasing their gross production to 500,000 barrel oil equivalent per day.
“Working towards this goal, we announced growth projects, including enhanced oil recovery, tight oil and gas projects, upgrade of liquid handling facilities and exploration, for which key contracts have been awarded to world class partners. These projects, along with an exit run rate of 200,000 barrel oil equivalent per day in March 2018, will pave the way to achieve 300,000 barrel oil equivalent per day in the near-term and 500,000 barrel oil equivalent per day in the medium term,” he said.
Vedanta had bid for all 55 blocks on offer in the first round of oil and gas auctions under the open acreage licensing policy auction. The Anil Agarwal-led Vedanta is likely to bag as many as 40 oil and gas exploration blocks in India’s maiden open acreage auction, official sources had earlier said.