Cairn Oil & Gas sees "large untapped potential" in India’s northeast and plans to expedite exploration activities in the region in the coming fiscal, chief financial officer (CFO) Hitesh Vaid told Moneycontrol in an interview.
In 2025-26, Cairn Oil & Gas would drill a minimum of six wells in its Assam block, he said. The company has already been drilling in the area and is bullish that the region will become its next hub.
“We have been doing exploration in this (Assam) block for the last few quarters; we have drilled a few wells. Having drilled a few wells currently, we feel that there is a large untapped potential (in the northeast)," said Vaid.
“We are quite bullish on the northeast being the next hub and our vision is to create a growth story similar to what we created in Rajasthan. In the northeast, we have one block which is already producing around close to 1,000 bpd (barrels per day) oil equivalent. We recently announced investment in the northeast but that's a potential investment. We still need to ensure that we find oil and monetise that oil," he added.
Vedanta Group chairman Anil Agarwal announced in February that the company would invest Rs 50,000 crore in Assam and Tripura's oil and gas sector over the next three to four years. Cairn Oil & Gas would use the investment to set up oil and gas exploration and production facilities in the state, said Agarwal. The company operates 12 blocks acquired under the Open Acreage Licensing Policy (OALP) and one under the Discovered Small Field Policy in Assam and Tripura.
Cairn Oil & Gas has a total of 62 blocks (onshore, offshore and deep-water) in India covering around 60,000 sq km in area.
50% contribution towards domestic production
The company has set an ambitious target of accounting for 50 percent of India’s total oil and gas production. Vaid said Cairn Oil & Gas would utilise its large portfolio of blocks to meet the target.
With the government opening up more acreages for exploration, Cairn Oil & Gas plans on adding more blocks to its portfolio while continuing efforts towards ramping up production from its old and mature fields, said Vaid.
“We have 62 blocks, plus, in OALP-IX round, for which the results will be announced shortly, we are going to add acreages. OALP-X has also been announced, which is by far India's biggest round, focusing on deep-water and ultra-deep-water. So, we will be actively participating in that. This will enable us to build a portfolio. We can reach a 50 percent production (target) if we have a large portfolio. Our portfolio is a mix of both onshore and offshore, and so it is not concentrated at one place,” said Vaid.
While pitching for new blocks, the company is not ignoring its old ones. Vaid said the company is banking on increasing production of tight oil—crude oil trapped in low-permeability rock formations—from its flagship Rajasthan block.
“We will focus on maximising volumes from our existing fields. What we are trying to do in onshore, in Rajasthan, is that we have a large discovery of tight oil. Till now, we have been chasing conventional oil. Now, when conventional oil is declining, we are now chasing tight oil,” said Vaid.
Eyes on global partnership
To dive into deep- and ultra-deep-water exploration in India, Vaid said Cairn Oil & Gas has been engaging with global players to get the right technology and equipment in place. In the coming fiscal, the company plans to drill three to six wells in its block in the Krishna-Godavari Basin.
“A lot of global operators are now back into oil and gas, which, a couple of years back, they were shying away from. These operators are also looking for investment and India is one country that is encouraging investment in oil and gas. These players are very keen to come to India,” said Vaid.
The Lok Sabha passed the Oilfields (Regulation and Development) Amendment Bill, 2024, on March 12. The bill is aimed at ensuring policy stability, international arbitration and extended leases to attract foreign investment in India’s exploration sector.
Vaid said international players are willing to invest in India on account of the government’s continued efforts towards creating a positive environment and a shift in global view towards ramping up oil and gas production.
“The Indian government has been trying to create a positive environment (in the oil and gas sector), which has been very attractive for foreign investors who have been shying away from the Indian market. It's not just the ORD Act but also what has been happening in the last few years (in the country),” said Vaid.
“What is also true is the shift in the global view. With the change in the government in the US, everybody is talking about more oil and gas, and people have realised that it's not about oil and gas or alternative sources, but it is about ‘and’,” he added.
Global oil and gas players have been looking at ramping up investments with US President Donald Trump backing the sector and demanding companies to boost production.
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