In a move to increase the production capacity of its oil & gas exploration firm, Cairn India ltd, Vedant Group is planning to invest Rs 30,000 crore in the next three years. The production capacity of Cairn India in the country may go up to 3,50,000 barrel of oil equivalent per day. The company also expects an additional 1,00,000 barrels per day of oil and oil equivalent gas, primarily from its prolific Rajasthan fields, according to mining billionaire Anil Agarwal.
Till September end, Cairn India produced 2,06,230 barrels per day of oil equivalent and the bulk of the production came from its Rajasthan block that gave 1,67,699 barrels of oil equivalent per day (boepd). The Ravva field in the Bay of Bengal produced 18,823 boepd and Cambay another 9,877 boepd.
Expecting the merger of the cash-rich Cairn with its parent Vedanta ltd is likely to be completed by March-end Agarwal said, “We are on track. There is no problem. The merger will be completed by March. As India has been very less explored, we believe there are enough resources below the ground that can be produced.”
Cairn India has been operating for more than 20 years playing an active role in developing India’s oil and gas resources. “Till date, Cairn India has opened 4 frontier basins with numerous discoveries, 37 in Rajasthan alone,” he said.
The Mangala field in Barmer, Rajasthan, discovered in January 2004, is the largest onshore oil discovery in India in more than two decades. Mangala, Bhagyam and Aishwariya fields -- major discoveries in the Rajasthan block -- have a gross ultimate oil recovery of over 1 billion barrels from primary, secondary and enhanced oil recovery (EOR) methods. “Out of the $50 barrels per day of price, the government gets $43 in taxes, royalty, cess and profit petroleum and the company gets $7. There cannot be any better Make in India,” he added.
Cairn is investing in enhanced oil recovery (EOR) and improved oil recovery (IOR) scheme to sustain production from the oil fields as also develop the Raageshwari Deep Gas (RDG) project. It is looking to increase gas production to 40-45 million standard cubic feet per day (mscfd) by 2017 and 100 mscfd by 2018-19. Natural gas production from RDG went up to 33 mscfd in the second quarter of 2016-17, from 28 mscfd in the first quarter, amounting to 3 billion cubic feet (bcf).
Cairn India shareholders in September had approved merger of the company after Cairn Energy of the UK voted in favour of the sweetened merger ratio. lIC, which holds 9.06 per cent stake in Cairn India, skipped the vote. Cairn Energy Plc, the erstwhile owner of Cairn India which sold a majority stake in the company to Vedanta, has 9.82 per cent.
In a bid to salvage the merger, Vedanta had in July this year sweetened the deal by offering three additional preference shares with the hope of winning over minority shareholders.
In the revised offer, Vedanta will give minority shareholders of Cairn India one share and four redeemable preference shares with a face value of Rs 10 each. The preference shares will carry a coupon of 7.5 per cent and tenure of 18 months.