If assurances given by Vedanta Resources chairman Anil Agarwal to the Prime Minister’s Office (PMO) are anything to go by, India’s oil production from Cairn India’s Rajasthan oil fields alone will shoot to 25.5 million tonnes per annum — which is more than the current total oil production of India’s largest oil producing company, ONGC.In a recent letter to the Prime Minister’s principal secretary Pullock Chatterjee, Agarwal assured of "production levels of 500,000 barrels of oil per day (or 25.5 mtpa)" from Rajasthan oilfields in the next few years.
These levels indicated by Agarwal is significant for an oil dependant country like India, which spends more than $135 billion a year on imports to meet 75-80% of its crude requirement.
Rajasthan oilfields are being operated by Cairn India, which was acquired by Vedanta Resources, and are currently producing 7.5 mtpa of oil, or 1,50,000 barrels per day. ONGC is a 30% joint venture partner with Cairn in Rajasthan oil fields.
A senior Cairn India official told HT on the condition of anonymity that the ambitious estimate of 25.5 mtpa of oil production was the result of recent discussions between Agarwal and the Cairn India management.
“I have encouraged the Cairn India management to leverage the best available global technology to achieve production levels of up to 235,000 barrels per day next year (2012/13) and even look at production levels of up to 500,000 barrels per day,” Agarwal said in his letters to Chatterjee, Planning Commission deputy chairman, Montek Singh Ahluwalia and petroleum secretary GC Chaturvedi.
“They (Cairn India’s team) have indicated that this is possible but would require very large capital allocation commitments and further exploration initiatives.”
Agarwal also said the centre and state governments along with ONGC receive over 81% of the net revenues (of Cairn India) through profit share, royalties, cess and taxes — leaving less than 19% for Cairn India.
“At 235,000 bopd, this would translate into revenues to the Government of R30,000 crore per year and at 500,000 bopd, this would increase to R60,000 crore,” he wrote.
India’s current oil production stands at 37.68 mtpa. While ONGC produces 24.4 mtpa from all its fields, Oil India Ltd’s output is 3.58 mtpa. Another 9.68 mtpa is produced from various private joint ventures including Cairn India’s Rajasthan oil fields.