Cairn India's Barmer field to pump oil next week

28 May 2009

Cairn India, the country's second largest private crude oil producer, is all set to commence production next week from its Mangala oil field in Barmer, Rajasthan, targeting an initial output of 30,000 barrels per day (bpd).

The company, which is a subsidiary of the UK-based Cairn Energy, operates three oil fields in Barmer namely Mangala, Bhagyam and Aishwariya (MBA). The Rajasthan operations are carried out on a 70:30 partnership with the state behemoth ONGC, which is now reported to be keen on an exit, as the obligation to pay all the levies had made the project economically unviable for the public sector oil giant. (See: ONGC feels unfairly burdened by Cairns deal).

The Mangala output will be augmented to 50,000 bpd by the fourth quarter of 2009 and will attain a level of 125,000 bpd by 2011. This will be supplemented by 40,000 bpd from Bhagyam and 10,000 bpd from Aishwariya to reach an overall plateau production of 175,000 bpd by 2011.

Cairn India is a laying a 585km heat-insulated pipeline at a cost of $800 million for the transportation of crude oil from the Barmer fields to Salaya oil export terminal near Jamnagar in Gujarat.

The company is planning to invest Rs16,000 crore ($3.4 billion) in the coming two years for the development of the Bhagyam and Aishwariya fields and construction of the marine export facility.

Funding for the Mangala project as well as the pipeline are already tied-up by the company.