Cairn India said on Tuesday that it is raising its estimates of the oil reserves in its Rajasthan fields by 37% and expects the peak output to be at 240,000 bpd (barrels per day).
The company earlier pegged its peak output at 175,000 bpd. The company raised the estimates for oil and gas reserves to four billion boe (barrels of oil equivalent) from 3.7 billion boe.
Rahul Dhir, the CEO of Cairn India expects another 2.5 billion boe yet to be discovered. The discovery will reduce India’s imports by nearly a quarter and save foreign exchange for the country which imports three-quarters of its oil requirements from abroad.
The Union Petroleum Minister Murli Deora said that the discovered oil reserves will augment oil production capacity and reduce the country’s reliance on imported fuel.
“We understand that there is 6.5 billion boe to be found and extracted (in Barmer block),” said Mr. Dhir.
Cairn has a stake of 70% in the field while state-run ONGC holds 30%. The company has already invested about ONGC holds 30%. Carin has invested about $4 billion and it will put in another $2 billion by 2011.
It produces 25,000 bpd which is expected to go up to 125,000 barrels later in 2010. The company said it will also initiate a pipeline to transport the crude to refineries on the west coast. At present, the oil is being transported by road tankers to the refinery of Reliance Industries Ltd and ONGC. Essar has become a new buyer of crude from the company.