Vedanta Group Chairman Anil Agarwal on Thursday said after the merger of Cairn India and Vedanta the combined entity will produce more and the target will be to account for at least 50 per cent of the country’s total oil production in the next four years.
This comes at a time when the group is set to complete the merger process within the next ten days. Cairn India currently contributes to 27 per cent of the country’s overall oil output, producing about 166,000 barrels of oil equivalent per day.
The Barmer block in Rajasthan has Cairn India and state-run Oil and Natural Gas Corporation (ONGC) as its partners and the Union Cabinet on March 22 had given an extension to the production sharing contract of the company beyond 2020. According to Cairn India, the production sharing contract (PSC) extension of Barmer block would add another 250 million barrels of oil equivalent into its reserves.
“We are looking to contribute about 50 per cent of the country’s total crude oil production in the next four years,” Agarwal said on the sidelines of a Confederation of Indian Industry (CII) summit in Delhi. He added that his group has contributed Rs 60,000 crore in 2016-17 to the government exchequer from all businesses like zinc, copper, iron ore and oil and gas.
The Barmer block, also known as Rajasthan block, includes the Mangala, Bhagyam, Aishwariya and Raageshwari oil and gas fields.
“India today consumes 200 million metric tonne (MMT) of oil and gas, which is expected to be 600 MMT by 2040. Looking into this, we are taking many steps like the recent extension of PSC for Cairn India. We expect them to contribute more from their current share of above 25 per cent to India’s crude oil production,” Petroleum Minister Dharmendra Pradhan said during the summit.
According to reports, Cairn India is planning investments worth more than Rs 35,000 crore after 2020, which will be finalised after the merger process is over.
“We have got all the clearances in place and a formal announcement is expected in another 10 days,” said Sudhir Mathur, chief financial officer of Cairn India.
Cairn India holds a 70 per cent stake in the Rajasthan block, while ONGC owns 30 per cent. The block RJ-ON-90/1 is spread over 3,111 sq. km west of Barmer.
Key points:
1. The group contributed Rs 60,000 crore to the government exchequer from all the business like zinc, copper, iron ore and oil and gas in 2016-17
2. According to Cairn India, the PSC extension of Barmer block would add another 250 million barrels of oil equivalent into its reserves
3. Cairn India currently contributes to 27 per cent of the country’s overall oil output, producing about 166,000 barrels of oil equivalent per day
4. Cairn India is planning investments worth more than Rs 35000 crore after 2020