Barmer: After giving the nation a massive oil discovery, Cairn India on Saturday began natural gas sales from its prolific Rajasthan block on borders with Pakistan even as it put another oilfield in the area on production.
Oil Minister M Veerappa Moily and Rajasthan Ashok Gehlot turned the valves to begin natural gas sales from the Raageshwari field to a fertiliser plant in Gujarat.
Cairn and its 30 percent joint venture partner Oil & Natural Gas Corp (ONGC) will initially produce about 5 million standard cubic feet per day (0.15 million standard cubic meters per day) of gas, which will go up to a maximum of 1 mmscmd by next year.
Besides, Cairn-ONGC joint venture started production from Aishwariya oilfield, third of the famous MBA (Mangala-Bhagyam- Aishwariya) discoveries in the block.
The field will initially add about 2,000 barrels per day to Rajasthan block's current production of about 170,000 bpd. At peak, the field will produce 10,000 bpd which may be achieved by end of the year.
Mangala, the largest of the 25 oil and gas finds Cairn has made in the Barmer dessert block, was put into production in August-end 2009 and is currently producing about 150,000 bpd. Bhagyam, the second biggest find in the area, began producing last year and is currently doing about 20,000 bpd.
Cairn India CEO P Elango said the company can produce more "provided we get timely regulatory approvals".
"We can make (this block) the largest producing field in the country," he said.
"Our gross Rajasthan development investment to date is more than Rs 18,000 crore and we intend to invest over Rs 6,000 crore in exploration and development activities during 2013-14."
ONGC's western offshore Mumbai High fields are the nation's biggest oilfield with an output of about 240,000 bpd (12 million tonnes).
Cairn currently produces small volumes of natural gas alongwith crude oil from the fields in the Barmer basin block. The gas produced in used for generating 48 MW of power that is used for internal consumption.
It, however, sees the resource base supporting commercial production of about 1 mmscmd.
Anil Agarwal, Executive Chairman of Vedanta Resources, which owns majority stake in Cairn India, said the company will bring technology and people to raise output.
Stating that India has abundant hydrocarbon resource, he said the Rajasthan block alone has potential to reach 300,000 bpd of crude oil production besides holding substantial natural gas resources.