Cairn Oil and Gas, a unit of Vedanta Ltd, plans to invest as much as $5 billion over the next 2-3 years as it seeks to expand oil production to almost 500,000 barrels a day, chief executive Prachur Sah said.
“Cairn’s ambition remains that we want to meet 50% of India’s oil and gas production, which means we want to go to almost 500,000 barrels a day, both from our existing assets and from the new blocks that we acquired. And the plan to do that is through investment in enhanced recovery and additional exploration activities,” Sah said in an interview. “For us to meet production targets, we should be looking at investing anywhere between $4-5 billion over the next two to three years.”
The oil and gas explorer is also looking to start shale production from its Barmer field in Rajasthan shortly to reach the half-a-million-barrel production target. Cairn’s current hydrocarbon production is 170,000 barrels of oil equivalent per day.
“Shale, to be honest, is a potential game-changer for the country and the industry in general. Also, if you look at Cairn, compared to others in India, our operating costs, we have managed to keep in the top quartile globally. And in shale, how you manage operating costs is one of the key differentiators. So we believe based on our experience we can manage costs at $40-45 a barrel for shale compared to the $50-55 or $60 that we see outside,” said Sah.
“Cairn aims to produce 50% of the country’s total oil and gas requirements but declining hydrocarbons production from its fields is a challenge.