Cairn’s Rajasthan project to reduce India's oil imports: Goldman Sachs

Cairn India's Rajasthan oil fields, which are likely to start production next month, will bring down India's oil import bill by $6.8 billion or 7 per cent, investment banker Goldman Sachs said in a report.

"Based on the recent discoveries in the Rajasthan basin, we believe that Cairn's peak production level can go beyond the company's present guidance of 175,000 barrels per day (8.75 million tons a year)," Goldman Sachs' conviction report on Cairn India said. It forecast a peak production of 190,000 bpd (9.5 million tonnes a year) of oil from Rajasthan by end of 2012-13.

"We now estimate this would represent about 20-22 per cent of India's total domestic oil production in fiscal 2013, making the Rajasthan project one of national importance. Rajasthan oil would likely bring down India's oil import bill by $6.8 billion at peak production, which is about 7 per cent of the country's net oil import bill," it said.

In 2008-09 India paid $75.5 billion (Rs341,887 crore) to the oil exporting nations to meet its increasing energy requirement. In addition to this, the government incurred a fuel subsidy of $18 billion.

India's current oil production is around 660,000 bpd (33 million tonnes a year).

Goldman Sachs Investment Research has added Cairn India Ltd in the conviction list, which is the strongest rating, in its June report.