As it looks at policy support to boost output from Rajasthan oil block, Cairn India on Wednesday called for predictable taxes and fiscal regime together with maintaining contract sanctity to aid production increase.
Addressing the company's Annual General Meeting (AGM) of shareholders here, Chairman Navin Agrawal said that for a nation undergoing transformational changes, a simple and forward-looking policy to encourage investment that maximises domestic oil and gas production would be a key enabler.
Citing example of the US which has turned from net importer of oil and gas to an exporter, he said: "Much like the US, maximum value can be created by encouraging domestic production of hydrocarbons. Can we as a nation, draw lessons from the USIJ Clearly, above-the-ground factors together with good infrastructure played a key role.
"Simple policy framework, predictability of taxes and fiscal regime, maintaining contract sanctity and facilitating private sector capital are key levers which have been effectively utilised by the US. This led to their energy renaissance."
Domestic production, he said, has a transformational role in a nation's development. It increases Government's revenue because of taxes and production levies. In turn, however, imported barrels of oil result in transferring our wealth."Adopting a strategic vision for our exploration and production (E&P) sector and following through with a stable policy regime can be a game-changer for India's upstream oil and gas landscape," he said.
Not only will it help minimise costly imports but will also strengthen our nation's balance of trade. "Thus, we need to make every effort to increase domestic production by maximising our resource potential," he said.Cairn produces a fourth of nation's domestic oil production with about 200,000 barrels per day of output from its prolific Rajasthan fields.
Agarwal said Cairn's production helped reduce the India's import bill by over Rs 48,000 crore. "Our annual contribution of over Rs 32,000 crore to the Government and its nominees would further strengthen Meanwhile, the company reported a 65 per cent drop in its first quarter net profit after booking a one-time depreciation charge on new accounting rules, and said it would invest $200 million in developing a gas find in predominantly oil-rich Rajasthan block.