India has 'good climate' to foster oil & gas sector: PM

Speaking at the beginning of oil production from Cairn India's on-land Mangala oilfield, he said the historic event reflected that a "very good climate has been created for foreign investment."

"I invite investors from all over the world (to invest in the oil and gas sector) ...The investment climate is positive. We are committed to facilitating (such investment) and providing all assistance," he said.

India has offered 70 oil and gas exploration areas and 10 coal bed methane (CBM) blocks -- the largest ever auction of oil and gas exploration areas in the country -- in the eighth edition of New Exploration Licensing Policy (NELP).

Singh described the beginning of oil production as the "beginning of a new era" for India and Rajasthan. The oilfield will facilitate a more prosperous state and economic development.

The nation, he said, had made economic progress but to eliminate poverty, rapid economic growth was needed. And energy was a necessity for faster economic growth.

The Prime Minister said world-over economic development has followed oil and gas discoveries and the same will happen in Rajasthan where newer avenues of employment will be created.

Cairn India has started production from the Mangala field -- the largest of 25 discoveries made by Cairn in the Barmer Basin in Block RJ-ON-90/1. First oil was evacuated via trucking to the Gujarat coast for onward transport to MRPL, one of the government-nominated buyers.

The oil production will gradually ramp up to a peak output of 1,75,000 barrels per day over the next two years. At this point, oil production from Rajasthan oil fields will account for over 20 per cent of India’s domestic oil output.

Petroleum Minister Murli Deora said the gas discovery in the Krishna Godavari basin by Reliance Industries and the oil find in Barmer demonstrated that India is a hydrocarbon rich nation.

Oil production from Mangala will save around 7 per cent in crude oil import bill, he said.
"Cairn has invested about Rs 10,000 crore in the area. The total investment in this project will be more than Rs 20,000 crore.

"Central Government would get Rs 46,000 crore as its profit petroleum revenue over the life of the project. The Government of Rajasthan would get Rs 12,000 crore as royalty for the first five years of the project," he said.

Cairn India Chairman Bill Gammell said the development of the oil field in five years from discovery was reflective of the investor friendly environment in the country.