Cairn India will invest Rs 30,000 crore ($4.5 billion) in the next three years to produce an additional 1,00,000 barrels per day of oil and oil equivalent gas, primarily from its prolific Rajasthan fields, said its mining billionaire promoter Anil Agarwal.
He also said the merger of the cash-rich Cairn with its parent Vedanta Ltd is likely to be completed by March-end.
"We have committed to investing Rs 30,000 crore to add 100,000 barrels per day of oil and oil equivalent gas over the next three years," he told PTI.
Cairn produced 206,230 barrels per day of oil equivalent in the second quarter ended September. Bulk of the production came from its Rajasthan block that gave 167,699 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.
"India has been very less explored and we believe there is enough resources below the ground that can be produced," he said.
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 USD 43 (in taxes, royalty, cess and profit petroleum) and the company gets USD 7. There cannot be any better Make in India," he noted.
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).
Agarwal added that the merger of Cairn India with Vedanta Ltd will be completed by March-end. "We are on track. There is no problem. The merger will be completed by March," he said.
While the shareholders of the two companies have approved the merger, it is awaiting nod of high courts and other regulatory bodies.
Through the merger, Agarwal is looking to create India's largest diversified natural resources firm, which can compete with BHP Billiton and Vale SA.
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 ($0.147) each. The preference shares will carry a coupon of 7.5 per cent and tenure of 18 months.
In June last year, Vedanta had offered shareholders of Cairn India one ordinary share and 7.5 per cent redeemable preference share with a face value of Rs 10 each.
Vedanta is said to be keen on using Rs 23,290 crore ($3.4 billion) cash lying with Cairn to pay off part of its Rs 77,952 crore ($11.4 bn) debt.