CAIRN India, the country’s second-largest crude oil producer after ONGC, is set to start production from its Rajasthan fields next week. Cairn, a subsidiary of Edinburgh-based Cairn Energy, plans to start production from the first train of 30,000 barrels of oil per day and will introduce a second train of 50,000 barrels per day by the fourth quarter of 2009.
“We are ready for production and it’s just a matter of time. We are consulting all the stakeholders including government officials for a suitable date,” Rahul Dhir, Cairn India’s managing director and CEO, told ET.
Mr Dhir said that the company is close to an agreement with the government on the formula for the pricing of its Barmer crude oil. “The agreement on pricing is imminent and is not a constraint for the production of crude oil,” he added.
When the fields hit peak production of 1,75,000 barrels of oil per day in 2011, they will contribute over 20% of the country’s domestic crude oil production, marking a significant step in India achieving energy security.
Reliance Industries’ KG basin gas production will reach a peak of 80 million metric standard cubic metres per day (mmscmd), or 5,50,000 barrels of oil per day (bopd) of oil equivalent, by December 2009. Together with Cairn India’s crude production from Barmer oilfields, it will contribute to over 60% of India’s oil and gas production and will be instrumental in projected reduction in oil and gas import bills. India is Asia’s thirdlargest oil consumer and imported 2.56 million barrels per day (bpd) in 2008-09, an increase of 5.3% over the previous year. India spent $68 billion on imported crude in 2007-08.
Cairn plans to initially transport the crude oil from its Rajasthan fields to the Gujarat coast by trucks till 2009-end when the company will commission the world's longest heat-insulated pipeline. “The transportation by trucks will cost $7-10 per barrel,” Mr Dhir said. Cairn India’s March quarter net profit plunged 84% on falling crude prices and higher costs. Its consolidated quarterly net profit fell to Rs 18.68 crore from 1.164 billion a year before. According to Mr Dhir the quarter was marked by lower operating income and also there was one-time impact from foreign exchange exposure. Income from operations in the quarter ended March declined to Rs 182 crore from Rs 316 crore a year ago.
“We are ready for production and it’s just a matter of time. We are consulting all the stakeholders including government officials for a suitable date,” Rahul Dhir, Cairn India’s managing director and CEO, told ET.
Mr Dhir said that the company is close to an agreement with the government on the formula for the pricing of its Barmer crude oil. “The agreement on pricing is imminent and is not a constraint for the production of crude oil,” he added.
When the fields hit peak production of 1,75,000 barrels of oil per day in 2011, they will contribute over 20% of the country’s domestic crude oil production, marking a significant step in India achieving energy security.
Reliance Industries’ KG basin gas production will reach a peak of 80 million metric standard cubic metres per day (mmscmd), or 5,50,000 barrels of oil per day (bopd) of oil equivalent, by December 2009. Together with Cairn India’s crude production from Barmer oilfields, it will contribute to over 60% of India’s oil and gas production and will be instrumental in projected reduction in oil and gas import bills. India is Asia’s thirdlargest oil consumer and imported 2.56 million barrels per day (bpd) in 2008-09, an increase of 5.3% over the previous year. India spent $68 billion on imported crude in 2007-08.
Cairn plans to initially transport the crude oil from its Rajasthan fields to the Gujarat coast by trucks till 2009-end when the company will commission the world's longest heat-insulated pipeline. “The transportation by trucks will cost $7-10 per barrel,” Mr Dhir said. Cairn India’s March quarter net profit plunged 84% on falling crude prices and higher costs. Its consolidated quarterly net profit fell to Rs 18.68 crore from 1.164 billion a year before. According to Mr Dhir the quarter was marked by lower operating income and also there was one-time impact from foreign exchange exposure. Income from operations in the quarter ended March declined to Rs 182 crore from Rs 316 crore a year ago.
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