Cairn India Ltd plans to spend $2 billion over the next two years for expanding its oil and gas exploration business, Chairman Navin Agarwal said on Wednesday. He was addressing the media after the sixth annual general meeting of the company here.
Agarwal said that company plans to invest about $600 million for exploration in the Rajasthan block alone, which has a huge potential for hydrocarbons. “The block is spread over 3,000 km and we have not even explored half of that,” he said.
The company is producing about 175,000 barrels of crude oil a day from the block and expects it to support a potential production of 300,000 barrels a day, he said.
Agarwal said that the revised oil production (300,000 barrels) is subject to further investments and approvals by the Centre and Oil and Natural Gas Corporation Ltd, which is the joint venture partner in the block. Such a production level is equivalent to more than 35 per cent of India’s current crude oil production, he said.
Outgoing CEO Rahul Dhir said that the company has struck gas in the Rajasthan block and efforts are on to bring that into production. However, Dhir declined to comment about the size of the gas find and funds required for bringing it on stream.
South African block
Commenting on the company’s recent acquisition in South Africa, Dhir said the company had acquired a 60 per cent stake from PetroSA. “This would be in the Orange Basin in the offshore border between South Africa and Namibia. The potential of the block is subject to further exploration. However, it would be on trend with our existing discoveries, so we are quite excited about it.”
He declined to disclose the company’s investment in the block.
Mr Agarwal added: “Until now, we were constrained to look within India for exploration, but now that we have taken our first with South Africa, we would continue to look at other countries as well.”
On operations in Sri Lanka, he said the company plans to enter into the second phase of exploration and plans to commence the next exploration drilling campaign in mid-2013.
The Cairn stock closed at Rs 333.80, a 0.69 per cent increase over the previous close, on the BSE on Wednesday.