Cairn India to invest $2 billion over next two years
Cairn India to invest $2 billion over next two years
New Delhi:Cairn India Ltd, which is credited with the largest onshore oil discovery in India, plans to spend $2 billion (around ₹ 11,000 crore) over the next two years, according to company chairman Navin Agarwal. Of this, $600 million would be spent towards exploration activities in Rajasthan.
The announcement assumes importance given the limited supplies from India’s domestic energy sources and its dependence on imports—as high as 80% for crude oil and 25% for natural gas. The country is the world’s fourth largest consumer of energy, after the US, China and Russia.
The London-based Vedanta group acquired management control of the firm from the UK’s Cairn Energy Plc. in December 2011. The closure of one of the largest domestic acquisitions in India announced last August was delayed with state-owned Oil and Natural Gas Corp. Ltd (ONGC) making the resolution of a royalty dispute a precondition for approval.
“Based on revised estimates, the total Rajasthan resource base now supports a potential production of 300,000 barrels of oil per day, subject to approvals from the government of India and our joint venture partner, the Oil and Natural Gas Corp. Ltd and further investments," Agarwal said in a note.
This announcement also comes at a time when the oil explorer’s managing director and chief executive Rahul Dhir is slated to step down with effect from 31 August.
The oil ministry says the country’s energy demand is expected to more than double by 2035, from less than 700 million tonnes of oil equivalent (mtoe) today to around 1,500 mtoe.
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