Cairn India plans $2 bn investment over two years

Cairn India plans to invest $2 billion over the next two years in oil and gas exploration and production both in the country as well as abroad.

“Over the next two years, we envisage a net capital expenditure of $2 billion to expand exploration and production of oil and gas in the country and abroad, of which, we plan to invest $600 million in Rajasthan exploration alone,” Cairn India chairman Navin Agarwal told reporters on the sidelines of the company’s sixth annual general meeting (AGM) here.

Cairn, which is currently producing 1,75,000 barrels oil per day from its Rajasthan blocks, expects the potential production of 3,00,000 barrels oil every day.

[caption id=“attachment_426775” align=“alignleft” width=“380”]  Reuters[/caption]

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Based on the revised estimates, the total Rajasthan resource base now supports a potential production of 3,00,000 barrels of oil per day, subject to government approvals and our joint venture partner ONGC and further investment, Agarwal said.

The said production level is equivalent to over 35 percent of the domestic current crude oil production, which will help reduce the annual import bill by over $10 billion and contribute annual revenue of $5 billion to the government, he said.

Commenting on its overseas operations, Agarwal said, the company is expanding its international footprint following initial success in Sri Lanka.

The innovative geological studies aided by 3D seismic data led to two discoveries in the frontier Mannar Basin off Sri Lanka. The company has now entered the second phase of exploration and intends to commence drilling in mid 2013.

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The company has also successfully acquired a 60 percent stake from Petro SA in an oil and gas exploration block on the West Coast of South Africa.

Cairn India would be the operator in the block, while PetroSA, owned by the government of that country, would hold the remaining interest, Cairn India outgoing managing and chief executive Rahul Dhir said.

PTI