Rajasthan could contribute up to 40% of India's total oil production by 2014

India’s domestic oil production is likely to increase by a third in two years, if plans submitted by Cairn India to the government get approved.

Cairn has sought the nod of the environment ministry to increase the production capacity of its Rajasthan block to a whopping 350,000 barrels per day from the current production of 125,000 barrels per day.

In comparison, India’s total production of crude oil is just 715,000 barrels a day, including the  307,000 barrels produced by its biggest field, Bombay High.

The boost in production will be carried out by bringing 21 new discoveries in Rajasthan into production. Currently, only 4 fields are in production.

While the company has been claiming that it has several additional discoveries in Rajasthan besides the four in production, the move to convert them into producing fields indicates that Cairn has finished appraising them.

The foreign-owned firm is in the news after the Government decided to set up a group of ministers to decide whether or not to let it be taken over by Anil Agarwal’s Vedanta Resources.

It has already run into trouble with its minority partner, the Oil and Natural Gas Corp (ONGC) over expansion plans, with the latter reportedly blocking its plans to expand production from 125,000 barrels to 160,000 recently.

The expansion, if approved, will reinforce Rajasthan’s position as India’s own golden sands. Going by the current trends of production, the desert state would supply around 37-40% of India’s total crude production in two years, even as Bombay’s High’s share falls to 28-30%.

India currently consumes around 2,600,000 barrels of oil per day, out of which around 27% is produced locally. A current consumption, the extra production from Rajasthan would increase the share of domestic production to 36%.

The expansion, which would cost Rs 25,000 crore, would also require the firm to increase its ground water consumption from 32,500 cubic metres per day to 82,500 cubic metres, a sensitive point for the environment ministry. A large part of the salty ground water is pumped back into the earth as part of the company’s efforts to flush out the maximum quantity of oil.