Cairn India will continue to enhance crude oil and natural gas production from its existing reserves while maintaining its brand identity, according to Chief Financial Officer Sudhir Mathur.
Speaking to BusinessLine , he said, “The merger (of Vedanta and Cairn India) will allow us to enhance oil and gas production from our existing reserves. We will leverage the stronger balance sheet after the merger for our capital intensive businesses.”
Mathur explained that the merger will help the company to withstand commodity price shocks. He said: “In a volatile price environment, the stronger balance sheet can manage cash flows very well.”
Mathur said that the company will bet on Enhanced Oil Recovery to accentuate production from its reserves.
Commenting on the expectations from the Enhanced Oil Recovery Policy proposed by government, Mathur said, “The government should incentivise EOR. It can do so through incentives on production or through any other means it deems fit.” Currently nearly 70 per cent of proceeds from crude oil sale go to the government, he added.
On the Cairn India’s plans to further the exploration business by acquiring more assets, he said, “We expect the first round of oil and gas block auctions under the Hydrocarbon Exploration Licensing Policy regime to be conducted shortly and we will participate in it.”