Cairn India plans $2 bn capex over two years

Cairn India plans $2 bn capex over two years

Cairn India plans to invest USD 2 billion over the next two years in oil and gas exploration and production both in the country as well as abroad.

"Over the next two years, we envisage a net capital expenditure of USD 2 billion to expand exploration and production of oil and gas in the country and abroad, of which, we plan to invest USD 600 million in Rajasthan exploration alone," Cairn India Chairman Navin Agarwal told reporters on the sidelines of the company's sixth annual general meeting (AGM) here.

Cairn, which is currently producing 1,75,000 barrels oil per day from its Rajasthan blocks, expects the potential production of 3,00,000 barrels oil every day.

Based on the revised estimates, the total Rajasthan resource base now supports a potential production of 3,00,000 barrels of oil per day, subject to government approvals and our joint venture partner ONGC and further investment, Agarwal said.

The said production level is equivalent to over 35 per cent of the domestic current crude oil production, which will help reduce the annual import bill by over USD 10 billion and contribute annual revenue of USD 5 billion to the government, he said.

Commenting on its overseas operations, Agarwal said, the company is expanding its international footprint following initial success in Sri Lanka.

The innovative geological studies aided by 3D seismic data led to two discoveries in the frontier Mannar Basin off Sri Lanka. The company has now entered the second phase of exploration and intends to commence drilling in mid 2013.

The company has also successfully acquired a 60 per cent stake from Petro SA in an oil and gas exploration block on the West Coast of South Africa.

Cairn India would be the operator in the block, while PetroSA, owned by the government of that country, would hold the remaining interest, Cairn India outgoing managing and chief executive Rahul Dhir said.

The block would be an anchor exploration asset in South Africa, and would augment Cairn India's existing portfolio. We expect gas discoveries in South Africa and our commitment is to bring the best technology, Dhir said.

Cairn India was constrained for exploration all these years, and now we are encouraging exploration potential abroad and South Africa is first step.

The company's strategic goal of growing its resource base by acquiring exploration and appraisal assets not only in India but also outside Indian sub-continent, Agarwal said.

Elaborating on Rajasthan Refinery proposal, Agarwal said, Cairn India may get invited to take minority stake in the proposed refinery.

On company's succession plan he said, Dhir has decided to leave the company this month-end to pursue his entrepreneurial interests.

The company has appointed Elango as interim CEO and the search for Dhir's successor is underway.

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