Vedanta’s oil unit to invest $4 billion to boost exploration, says Chairman Anil Agarwal

Nobody will regret investing in India in hydrocarbon, Agarwal said

Vedanta Ltd aims to invest $4 billion in its energy business over the next three years with a focus on scaling up capacity, Chairman Anil Agarwal told Moneycontrol on February 6.

Cairn Oil & Gas, Vedanta’s oil and gas unit and India’s largest private sector oil and gas explorer, in early 2022 said that it will spend $4 billion over the next three years to triple its production. The decision was driven by soaring crude prices at the time.

The group has been battling mounting debt, raising concerns over its expansion plans.

“We will add 300,000 barrels of oil and gas, including offshore. We will open up our north-east asset where we have got a license. Our focus will be - exploration, exploration exploration,” he said on the sidelines of India Energy Week 2024 in Goa on February 6.

The company restructured its debt worth $3.2 billion in the third quarter of 2023-24 with bondholders approving the plan. Even though the company’s net debt stood at Rs 62,493 crore as of December 31, it is gearing up to scale up the energy business.

Cairn Oil and Gas will invest in existing blocks and will participate in bids for upcoming blocks.

When asked if his company will bid for the next round of exploration projects that will come up for bidding under the Open Acreage Licensing (OALP) mechanism, Agarwal said, “Yeah, we'll have to. We're expecting something to come and we'll definitely look at it.”

India Opportunity 

Inaugurating the second edition of India Energy Week, Prime Minister Narendra Modi said that India will invest $67 billion in the gas sector over the next 5-6 years. The PM said that India is investing more than ever in energy right now and every energy leader is looking at India to invest.

Agarwal said, “I can tell you one thing, nobody will regret investing in India in hydrocarbon. This is the only place in the world where you produce and sell also as there is a market too.”

Agarwal said the recent geopolitical tensions, including the Hamas-Israel conflict, have highlighted the need for countries like India to scale up their energy production.

The Vedanta Chairman said that India’s large population offers a big market and the youth population offers a talent pool for the industry, which investors would be attracted to.

Talking about Indian talent running the upstream companies globally — in the USA and the Middle East, he said that if they get an opportunity in India, they will come back.

He said that while the changes in the bidding process have made the process more attractive, increasing the duration of the license for these blocks would give companies like Vedanta the comfort of investing big bucks without the fear of license expiration.