Vedanta’s Anil Agarwal bets $4 bn on oil hunt amid price surge
India’s Cairn Oil & Gas, a unit of Vedanta Ltd., will spend as much as $4 billion over the next three years to more than triple its production, as high prices make investments attractive.
India’s biggest non-state producer, controlled by billionaire Anil Agarwal, plans to drill more wells to explore new oil and gas reserves across its 51 blocks in the country, Prachur Sah, deputy chief executive officer of Cairn, said in an interview to Bloomberg TV Friday.
“Our target is to reach half a million production in a very short time by doing these investments,” he said. “This investment is not just a number, but we have projects in line. We are looking at exploration heavily over the next few years to get to these levels.”
Cairn’s plan stands out compared to producers around the world, most of whom are staying away from committing investments in oil and gas and which is leading to a sharp increase in prices as rebounding demand outstrips supply. That’s impacting import-dependent nations such as India, which meets 85% of its oil needs through overseas purchases, and prompting the government to push explorers to expand their oil hunt.
The company produces a quarter of India’s overall oil production and aims to raise the contribution to 50% of the country’s total output, according to its website. Cairn’s average production was at 159,000 barrels of oil equivalent during three months that ended December 31.
“We are working with the government to see how policies can be made conducive in oil and gas, and get the production increased to where it can be sustainable to manage the domestic requirements,” Sah said.
The company has invested about $2.5 billion in the past three years when big producers around the world withheld spendings after oil prices fell. Cairn has made a few oil and gas discoveries recently, and expects to strike more as it steps up exploration.
The oil producer remains committed in meeting its carbon-neutral target of 2050 even with increase in fossil fuel production.
“We remain confident that while we increase oil and gas production, it can be done in a sustainable way,” Sah said. “There will be a significant amount of technology and investment in these projects to get to the net-zero ambition by 2050.”
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.