Vedanta revamping Cairn India operations
Mumbai: Metals and mining giant Vedanta Ltd, the owner of Cairn India Ltd, is revamping the latter’s operations and creating special business units to sharpen the company’s focus on oil and gas, two people aware of the development said.
Vedanta had acquired Cairn India last April and this is the first business reshuffle that the oil and gas subsidiary is going through.
“Cairn India will be seen in a new avatar now. The company is creating four to five new strategic business units (SBUs) which will have sharpened focus in these areas to propel the company to the next stage,” one of the two people cited earlier said on condition of anonymity.
Cairn produces 27% of India’s domestic crude oil output and it plans to take this to around 50%.
There are five projects that Cairn India is working on currently: the Raageshwari Deep Gas project; the enhanced oil recovery (EOR) programme at Aishwariya fields, the EOR programme at Bhagyam and Barmer Hill and Aishwariya Barmer Hill, which is a tight oil (shale oil).
The cumulative capital spend is in excess of $2 billion. The Mangala field in Rajasthan is one of the largest onshore oil discoveries in India. Mangala, Bhagyam and Aishwariya fields have gross ultimate oil recovery of over 1 billion barrels.
Cairn India did not reply to an email sent on 9 April.
In a bid to better its performance, last December, Cairn India had reshuffled its senior leadership team, wherein Sudhir Mathur took over as the chief executive officer; Suniti Bhat as the chief operating officer (COO); Pankaj Kalra as deputy chief financial officer and Sharad Goenka as chief strategy and policy officer.
“Cairn is laying a huge emphasis on bringing in its vision to contribute 50% of India’s crude oil production going forward. It is also upgrading its infrastructure at the Mangala Processing Terminal to increase liquid handling capacity by around 30%. Realigning its business would allow it to streamline a lot of processes to reach its target,” said the second person cited above.
Cairn plans to increase production volumes through methods including de-bottlenecking which has the potential to add around 20,000-30,000 barrels per day. The company has also commenced work at its Cambay block in Gujarat to monetize around $7 million of hydrocarbons.
Cairn has seven blocks in its portfolio. The blocks are located in four strategically focused areas. One block is in Rajasthan, one on the west coast of India, four on the east coast of India and one in South Africa.
Cairn is also focused on exploration both in India and abroad, and has started a seismic survey in its South Africa block.
Cairn has so far invested around $33 billion in the country. The company has also submitted expressions of interest for 15 fields (onshore and offshore) which are being put up for exploration under the Open Access Licensing Policy.
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