Cairn India planned to spend around Rs 11,000 crore ($2 billion) over the next two years, said Chairman Navin Agarwal at the sixth annual general meeting (AGM) of the firm. Of this, $600 million would be spent towards exploration activities in Rajasthan.
“Crude oil production from the Rajasthan block touched 175,000 barrels per day. The resource base for the block is now estimated at 7.3 billion barrels of oil equivalent in-place,” Agarwal said.
This was the first AGM for Agarwal and was marked with bouquets and brickbats.
While a few shareholders expressed concerns over the company’s non-transparent way of functioning, others were happy about Cairn India deciding to raise output from its Rajasthan block.
“In less than three years since commencing production, your company reached a significant milestone of 100 million barrels cumulative oil production from the Rajasthan operations,” said Agarwal.
“Your company has also discovered gas in the Rajasthan block and all efforts will be put to bring that into production as quickly as possible. The high exploration potential of the block is evident from the fact that more than 100 prospects and leads have been identified,” he added.
Agarwal said the Cambay field was an example of optimal asset utilisation.
Based on revised estimates, the total Rajasthan resource base now supported a potential production of 300,000 barrels of oil per day, subject to approvals from the government of India and their joint venture partner, Oil and Natural Gas Corporation (ONGC) and further investments, he added.
“Such a production level is equivalent to more than 35 per cent of India’s current crude oil production, which will help reduce the annual import bill by over $10 billion and contribute annual revenue of $5 billion to the government,” he said.
Cairn India said to simplify and consolidate the multi-layered structure comprising foreign subsidiaries, it has formulated a Scheme of Arrangement between the Company and some of its subsidiaries. The scheme has been approved by the High Courts of Madras and Bombay, shareholders and joint venture partners.
"We are actively pursuing the matter with regulatory authorities and these approvals are expected soon. As you will appreciate, it is only after the regulatory authorities’ approval that your Company will be able to declare and pay dividend," said Agarwal.