Agarwal asks PM to step in to help Cairn up oil output
NRI billionaire and chairman of the Vedanta Group Anil Agarwal has sought intervention of the PM for ensuring smooth exploration operations by his group company Cairn India in the Rajasthan oil block. Anupama Airy reports. Oil for thoughtbusiness Updated: Jul 14, 2012 00:07 IST
NRI billionaire and chairman of the Vedanta Group Anil Agarwal has sought intervention of the Prime Minister Manmohan Singh for ensuring smooth exploration operations by his group company Cairn India in the Rajasthan oil block.
In a recent letter to the PM, Agarwal listed roadblocks in the form of procedural bottlenecks that are delaying exploration activities in the block, which has the potential to reduce India's oil import bill by almost $10 billion (Rs. 55,000 crore) once oil production from the block reaches 5 lakh barrels of oil per day in the next few years.
Already, the present production of 1.8 lakh barrels of oil per day has reduced India's import bill by Rs. 11,000 crore per annum."The Rajasthan PSC and the mining lease have enabling provisions that allow carrying on exploration in development area, however, we have been asked to obtain government approval," Agarwal said in his July 6 letter to the PM.
"Each day lost in exploration cannot be recovered and since exploration is an integral part of production, we may be allowed to continue exploration activities in Rajasthan."
Stating that Cairn India has also discovered gas in the Rajasthan block, Agarwal assured the PM that the company will put all its efforts to bring the gas into production as quickly as possible.
"As exploration is continuing in other producing blocks in the country, we request the government approval for exploration in Rajasthan to enable us to achieve the full production potential," Agarwal said. "However, this also requires further exploratory work and our exploration team and infrastructure is waiting eagerly to proceed with exploration activities at full pace."
While Cairn India is targeting for 5 lakh barrels of oil production from the block, Agarwal said that even the 3 lakh barrels of oil production per day — that Cairn expects to reach in the next two years — will meet almost 35% of India's total crude oil requirement and reduce annual import bill by over $10 billion (Rs. 55,000 crore) besides contributing annual revenue of Rs. 30,000 crore to the government.
"The government of India, government of Rajasthan and ONGC receive about 82% of net revenues by way of profit, petroleum royalties, cess and taxes, leaving 18% for Cairn India," Agarwal sad in his letter.