Mumbai: Cairn India will invest USD 3 billion (over Rs 16,000 crore) over the next three years in finding more oil and gas in its showpiece Rajasthan oilfields and other blocks in India, its Chairman Navin Agarwal said today.
Of this, the company will invest more than Rs 13,000 crore in the prolific Rajasthan block alone, Agarwal told the company's annual shareholders’ meeting.
The investment will be fully funded from the firm's cash resources and will target adding 530 million barrels of oil to its reserves.
"Over the next three years, through the end of FY2016, your company will invest more than Rs 16,000 crore (USD 3 billion) in pursuit of finding and producing more oil," he said. "In Rajasthan, as an example, your company will invest more than Rs 13,000 crore (USD 2.4 billion) and drill more than 450 wells."
Cairn plans to raise crude oil production from Rajasthan fields by as much as 23 percent to 215,000 barrels per day by March, 2014.
Rajasthan block currently produces under 175,000 bpd from five fields --- Mangala, Bhagyam, Aishwariya, Raageshwari and Saraswati.
The company plans to drill more than 450 wells in Rajasthan block over a three year period, a significant increase from the current rate of 25 wells drilled in FY'2013. The wells planned include 100 exploration and appraisal (E&A) wells, while balance will be development wells to sustain and enhance production volumes.
The E&A wells are aimed to target gross recoverable risked prospective resource of 530 million barrels of oil equivalent.
"We have a well-balanced portfolio of exploration, development and producing assets and a clear plan, which will see us aggressively pursue exploration and development opportunities in the months and years ahead," Agarwal said.
In the Rajasthan block, Mangala field is producing at plateau rates of 150,000 bpd. Aishwariya commenced production in March and is expected to ramp up to approved rate of 10,000 bpd over the next few months.
Bhagyam, the second biggest oilfield behind Mangala, is expected to ramp up to the approved rate of 40,000 bpd by the second half of current fiscal.
The aggressive exploration and fast-track development is designed to bring new fields into production in a region where Cairn India has already discovered around 1.3 billion barrels of oil equivalent resources but has drilled only a part of its acreage.
Agarwal said Cairn's operations contributed Rs 20,000 crore to the government, perhaps the highest in private sector. The company contributed more than 80 percent of India's crude oil production growth last year, saving Rs 38,500 crore (USD 7 billion) in foreign exchange.
Cairn recommenced exploration in Rajasthan after a gap of five years, that resulted in its 26th discovery.
"We committed investment of about USD 3 billion on further exploration and increase in production," he said.
Cairn is seeking approval of an Integrated Field Development Plan for Rajasthan discoveries. "An early approval will substantially expedite production ramp up," he said adding the company had also submitted a formal application for an extension of Rajasthan block licence.
"In addition to sustaining and increasing production from five oil producing fields, your company is also working towards commercialising 20 other discoveries," he said.
Further renewed exploration will help realise an estimated 530 million barrels of oil equivalent of gross recoverable risked prospective resource, he said.
Over the last year, Petroleum Ministry announced numerous positive policy changes - most significantly, policy clarity on exploration in development blocks allowing continued exploration in discovered field or Mining Lease areas.
"Exploration has been, and will continue to be, central to our growth plans. As we embark on the next stage of our growth journey, I could not be more excited about our future," he said.