Cairn to invest $2 billion in India

Cairn India on Wednesday said it will invest about $2 billion in the country over the next one and a half years for developing oil fields and building a pipeline which will deliver oil from Barmer in Rajasthan to the coastal areas of Gujarat.

"Out of the $2 billion investment, $1.8 billion will go in Rajasthan alone and the remaining will be used for other blocks in other parts of the country," Cairn India chairman Sir Bill Gmmell said at the company's annual general meeting.

Cairn India is developing three fields in Rajasthan -- Mangala, Bhagyam and Aishwariya. It also plans to start test drilling in the Ganga Valley block in Bihar by the end of the current year or early next year.

Gmmell said the company is confident of delivering first oil from Managala in the second half of 2009 followed by oil from Bhagyam and Aishwariya in 2010.

"Subject to regulatory approval, the estimated sustainable plateau rate of production from these fields has increased from 1,50,000 barrels per oil day to 1,75,000 bopd.

If the use of enhanced oil recovery techniques prove successful, there is a further resource potential of over 300 million bopd," he said.

Once oil starts flowing from Rajasthan, Cairn India would have the potential to account for 25 per cent of India's oil production in the next decade, Gmmell said adding that this would be a significant achievement for a company which started operations in the country only 13 years ago.

Cairn India has exploration interests in 14 blocks. It will also bid for additional assets in the seventh round of NELP. Recently it has been awarded a block in Sri Lanka.

Cairn India has started work on the 600 kilometer pipeline. It is scheduled for completion in the second half of 2009, aligned to the first oil production from Mangala.

Larsen & Toubro has been awarded the integrated engineering procurement and construction (EPC) contract for the project.