Cairn Oil and Gas plans to invest $1bn in three Indian oil fields

Vedanta Resources subsidiary Cairn Oil and Gas is planning to invest more than $1.1bn in three oil fields in Barmer, Rajasthan, India.

To be made in the coming 18 months, the investment will enhance the crude oil production from the Mangla, Bhagyam and Aishwarya fields.

The company’s move follows the completion of ten years of operations at the Mangla processing terminal in Barmer.

The investment will be used to implement the alkaline surfactant polymer (ASP) technology, which is estimated to increase output from the three fields.

Cairn Oil and Gas CEO Ajay Kumar Dixit said: “With the implementation of ASP enhanced oil recovery, we aim to increase the recovery factor from 36% to over 50%. This means that we will be able to extract more than half the crude oil present in the fields.”

Dixit told BusinessLine that the company is awaiting final approvals from the Indian Ministry of Petroleum and Natural Gas to be eligible for getting the benefits under the policy announced for enhanced oil recovery.

Dixit added: “The implementation of ASP EOR will raise the average cost of production in Barmer from $8 a barrel to $15.”

The company said its investment is subject to approvals from the Oil Ministry and noted that it has submitted all the documents for approvals to be eligible to gain the benefits under the EOR policy.

Last September, the Indian Government approved the EOR policy framework to promote and incentivise new methods and techniques of oil production from existing hydrocarbons reserves for augmenting the domestic production of oil and gas.