Rajasthan: Cairn India to invest $4 billion in Barmer oil block

On Tuesday, Cairn Oil and Gas, a unit of Vedanta Ltd, decided to invest $4 billion in its flagship Barmer oil block in Rajasthan.

Notably, the decision from Cairn India comes a day after Delhi high court allowed a 10-year extension to the block on the condition that it pays a higher share of profit to the government. The extension will result in an overall increase of oil and gas reserves of 400 billion barrels and a production of 125,000 barrels.

Sudhir Mathur, chief executive officer of Cairn India, said, “The extension also increases our reserves by 250 million barrels. That is quite a big booster to our overall reserve position.” “Cairn has driven up its share of India’s oil output by 3.5 times in the last nine years, significantly from the Rajasthan block and the extension is a great acknowledgement of our performance,” said Mathur.

“We are spending $4 billion, out of which we have already signed contracts worth $2.3 billion and the work has started in a big way. There are already 13 rigs operating in the Rajasthan block,” he added.

“The government of India, acting through the directorate general of hydrocarbons, ministry of petroleum and natural gas, has granted its approval for a 10-year extension of the PSC for the Rajasthan Block, RJ-ON-90/1,” Vedanta Ltd said in an exchange filing on Monday.

It is to be noted that state-run Oil and Natural Gas Corp. (ONGC) is a 30% partner in the Barmer oil block.

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