Cairn Oil And Gas Plans To Invest $2.5 Billion To Boost Output
Cairn Oil and Gas, part of billionaire Anil Agarwal-led Vedanta Ltd., plans to more than double its crude oil production in the next three-four years.
“We’re currently producing 200,000 barrels of crude oil per day from the Mangala, Bhagyam and Aishwarya oil fields in Rajasthan and are firm that we’ll ramp it up to 500,000 bpd,” Sudhir Mathur, chief executive officer of Cairn Oil and Gas, told BloombergQuint in an interview at Barmer, Rajasthan. “By investing $2.5 billion, we will increase production by at least 150,000 bpd.”
Mathur said the company, earlier called Cairn India, has restarted exploration in existing blocks in Rajasthan to meet its production target. Mangala field in Rajasthan, which was discovered in 2004, is the largest onshore oil discovery in India in over a decade. Mangala, along with Bhagyam and Aishwariya fields, have a gross hydrocarbon equivalent of 2.2 billion barrels of oil, according to the company’s website.
India imports nearly 80 percent of the oil it consumes and aims to cut its crude import bill by 10 percent by 2022. Initiatives such as the Open Acreage Licensing Policy—in which Vedanta won 41 oil exploration blocs—are aimed at attracting more investors and boosting production.
Cairn, which contributes about a fourth of India’s crude oil production, said it will achieve its target by focusing on technology. The company, Mathur said, recognised the potential of chemical enhanced oil recovery method at the Mangala field—in which polymers or alkaline surfactant polymers are flooded into the oil field at an early stage to increase crude extraction.
“We will implement the technique in Bhagyam and Aishwarya oil fields, too,” Mathur said, adding: “Monetisation of tight oil and satellite fields and ramping up of gas business is also on the plate.”
Mathur said that Cairn is also investing to increase gas production. “We intend to increase our gas production from 10,000 standard cubic feet per day to 50,000 standard cubic feet equivalent over the next 12-18 months.”
He declined to comment on Vedanta’s investments in the blocs that it won under the recent auctions conducted by the government. “It’s difficult to comment (on the investment) that we would be making because the focus is on exploration.”
“We’d be investing a lot in the seismic as well as drilling programmes to determine the in-place volumes.” The development cost estimates would come later, he said. “But we would start the programme as early as possible.”
Also read: Vedanta To Invest $8 Billion In 2-3 Years
(Updates an earlier version to change the name to Cairn Oil & Gas)