There seem to be some hiccups in Cairn's production plans in Rajasthan, according to sources. The company is believed to be preparing for a worst case scenario of an early decline of output of the Mangala field, and has apparently started updating analysts of a possible hit in production.
Decline of output from the Mangala oilfield, which produces 12, 5000 barrels per day (bpd), may begin in January 2014. Cairn had earlier anticipated a natural decline by mid 2014.
It plans to offset the output problems in Mangala oilfield through Enhanced Oil Recovery (EOR). But this process also seems to have hit some roadblocks. The company has also faced production hurdles in the Bhagyam field in Rajasthan.
Earlier, Cairn had informed the oil ministry that it would be unable to meet its target of 40,000 bpd in the Bhagyam field due to technical complexities.
In another move to meet production targets, it also plans to increase production from the Aishwarya field.
However, speaking to CNBC TV18, Cairn said that the Mangala oilfield was performing as per expectations and would recover. It also said that there was no hitch in the Field Development Plan for EOR, which was in the advance stages of approval. It stated that Cairn has access to multiple discoveries and was confident to achieve production of 175000 bpd at the end of FY13 and 200-215000 bpd in FY14.