Cairn India, which has its flagship crude oil production base in the Barmer region of Rajasthan, plans to drill additional 100 wells over a period of three years.
This will help in increasing the production of the company from the Barmer basin to 300,000 barrels per day (bpd) from the current 175,000 bpd.
During a conference call on Tuesday after announcing its third quarter results, company officials said while a guidance as to when the 300,000 bpd will be reached could be given only by the end of next fiscal, Cairn India will embark on a concentrated exploration programme before the end of 2012-13.
“This is a significant exploration programme for us as we plan to start soon enough and start drilling 7-8 wells each quarter,” said a company official, while addressing the conference call.
He said out of the total area to be explored and drilled, the company has already covered 65% of the area through 3D seismic survey (a process that gives a rough estimate of how much could be recovered from the area).
Analysts, who said the results of the company were in line with their expectations, said it is for the first time that Cairn also gave a guidance for the next year production figures and also for its Bhagyam fields, which is a positive sign for the company. “Cairn plans to reach a production level of 200-215 bpd by the end of 2013-14 and this will also include a production of 40,000 bpd from Bhagyam, said the company official during the call,” said an analyst.
Out of this, 200,000 bpd will be from the Mangala, Bhagyam and Aishwariya fields and the remaining will be from the satellite fields which are currently being developed, he said.
The company, however, has kept its capex plan constant at $1.2 billion for developing the Barmer basin, 60% of which is development cost.
The company’s Bhagyam field had been experiencing some issues in ramping up production (as reported by the media a few months back), but now with the guidance, it seems the bottlenecks have been removed, said an analyst from a domestic brokerage.
For the quarter ended December 2012, Cairn posted a year-on-year jump in revenues of 38% to Rs4,277 crore and earnings before interest, tax, depreciation and amortisation (EBITDA or operating profit) of Rs3,258 crore, again a jump of 38 % as compared with the corresponding period last fiscal.