Cairn India Ltd, promoted by NRI billionaire and group chairman of global mining major Vedanta Resources Anil Agarwal, on Wednesday announced plans to invest $2 billion (Rs. 11,000 crore) over the next two years to increase crude oil production in its mainstay Rajasthan fields, which is also India's largest onland oil producing facility.
Stating this at the company's sixth annual general meeting, Cairn India chairman and Anil Agarwal's younger brother Navin Agarwal said that $600 million (or Rs. 3,300 crore) would be spent on raising oil output in Rajasthan from the present 175,000 barrels per day (bpd) to 300,000 bpd by 2014.
Any increase in the country's oil production is significant: India spent nearly $150 billion (or Rs. 825,000 crore) in 2011-12 to meet 80% of its annual crude oil requirement.
"Total Rajasthan resource-base now supports a potential production of 300,000 bpd of oil, subject to approvals from the government and our joint venture partner ONGC and further investments," Agarwal said, addressing Cairn India's first AGM since Vedanta took it over from Cairn Energy.
The 300,000 bpd target output, he said, is equivalent to more than 35% of India's current crude oil production.It will help reduce the annual oil import bill by over $10 billion (or Rs. 55,000 crore) and contribute annual revenue of $5 billion (or Rs. 27,500 crore) to the government.
Agarwal also said Cairn has discovered gas in the Rajasthan block, which the company would try and bring into production as early as possible.
"The resource base for the block is now estimated at 7.3 billion barrels of oil equivalent in-place - an increase of over 11%," Agarwal said.
State-owned ONGC Ltd is a 30% joint venture partner of Cairn India in the Rajasthan oil block.