Cairn India today got the nod for increasing output by another 25,000 barrels of oil/day from its producing Mangala fields in the Rajasthan block.
This development comes at a time as the company closes its fourth quarter numbers. The company got the management committee approval at 11 a.m. today.
Cairn’s Mangala field in Rajasthan is consistently producing at 125,000 barrels of oil/ day since August 2010. Now, the field can take the offtake to 150,000 barrels of oil/day.
The partners in the block are targeting to exit fiscal 2011-12 at 175,000 barrels of oil a day from Mangala and Bhagyam fields together. Cairn India, the operator of the block, holds 70 per cent stake, and ONGC holds the remaining 30 per cent.
The Bhagyam field in the block commenced production on January 19, 2012 and is producing 25,000 barrels of oil/day. The approved plateau rate for Bhagyam is 40,000 barrels of oil/day.
Mr Rahul Dhir, Managing Director and Chief Executive Officer, Cairn India, after the company’s third quarter (ended December 31, 2011) results had said, “Significant part of the currently envisaged basin potential of 240,000 barrels of oil a day to be met from Mangala, Bhagyam and Aishwariya fields (in Rajasthan block) in calendar year 2013.”
Cairn India has tied up Rajasthan oil fields' crude sales for with Indian Oil Corporation, Reliance Industries Ltd, and Essar Oil. The refiners are likely to increase their crude oil offtake for 2012-13.
Currently, Reliance is purchasing about 80,000 barrels of oil per day (bopd), while IOC takes about 15,000-20,000 bopd and Essar almost 30,000-40,000 bopd. The crude oil from Rajasthan is sold to the refiners at an average 10-15 per cent discount to brent on the basis of prices prevailing.
The Cairn India stock was trading up 0.61 per cent at Rs 352 on the BSE on Thursday.