Will add 15% to domestic production
Cairn India and its partner ONGC have been allowed to increase output from the company’s Rajasthan oilfields by up to 3 lakh barrels per day (bpd) from the 1.75 lakh barrels at present.
The Petroleum and Natural Gas Minister, M. Veerappa Moily, said on Friday that the Government had given its nod to the explorers to increase output.
“We have cleared the exploration plan of Cairn and ONGC from 175,000 bpd to 300,000 bpd. This will add 15 per cent to domestic production. The Government has decided to allow exploration in mining lease areas. It should open up sufficient investment and will help in reducing the imports,” Moily said at an Assocham event.
Explaining the scenario, P. Elango, Chief Executive Officer, Cairn India, said there was resource-based potential to ramp up production to these levels once exploration activities were undertaken.
The potential resource for the Rajasthan block is estimated at 7.3 billion barrels of oil equivalent (boe) gross in-place. The recoverable prospective resource in Rajasthan fields has increased from 250 million boe gross to 530 million boe gross, primarily due to generation of additional leads and prospects, according to Cairn India’s Web site.
“Next year (2013-14), we will carry out exploratory drilling. The results will be presented before the management committee. After this, the production revamp programme will be finalised,” Elango told Business Line.
Cairn India has lined up capital expenditure of nearly $2 billion for the next two financial years. Of this, $1.2 billion is to be spent on the Rajasthan block, Elango said. The Cairn India stock gained 3.01 per cent to Rs 337.40 on the BSE on Friday. The Barmer block in Rajasthan is now producing 1.75 lakh barrels of oil a day.
The Anil Agarwal-promoted Cairn India is the operator, with 70 per cent participating interest. Its joint venture partner, ONGC, has 30 per cent participating interest.