MUMBAI: Shares of oil producer Cairn India rose nearly three per cent Monday after the explorer said it plans to invest $2 billion to raise output by more than 70 per cent at its oilfields in the country's northwest.

Shares of Cairn, part of Britain-based resources giant Vedanta, controlled by tycoon Anil Agarwal, climbed 2.9 percent to a high of 285.6 rupees in trading on the Bombay Stock Exchange.

"In the next couple of years we are looking at around $2 billion investment. In the next five years, we are looking to drill at least 500 wells a year," Cairn India board member P. Elango told reporters at the weekend.

Cairn said it is aiming to use the $2 billion to raise output by 71 percent over the next few years.

The company is now producing 175,000 barrels of oil per day from its blocks in Rajasthan state and its fields have the potential to support production of 300,000 barrels a day, Elango said.

Greater domestic energy supplies for India, which imports some 80 percent of its crude oil needs, has become especially vital to reduce a high current account deficit, of which fuel purchases from abroad account for the largest chunk.

"I see import dependence coming down by 50 per cent by 2020 and by 75 percent in 2025. By 2030, we should be self-reliant," Oil Minister M. Veerappa Moily said on Saturday.

Cairn sold its 40 percent controlling stake in Cairn India in December 2011 to India-focused Vedanta Resources for $6.5 billion, after a long battle to win Indian government approval for the sale.

Cairn India said it has already invested 180 billion rupees ($3.31 billion) to boost production at oil fields and plans to spend another 60 billion rupees in the financial year that begins April 1.

On Saturday, the explorer launched production at Aishwariya, the third-largest field in Rajasthan. Other fields operated by the Vedanta group company include the Mangala, Bhagyam and Saraswati fields.

Cairn India holds a 70 per cent stake in the Rajasthan block, while state-run Oil & Natural Gas holds the rest.

 

Source : economictimes.indiatimes.com