India’s Cairn Oil & Gas, a unit of Vedanta, will spend as much as $4 billion over the next three years to more than triple its production, as high prices attract more investments.
India’s biggest non-state producer, controlled by billionaire Anil Agarwal, plans to drill more wells to explore new oil and gas reserves across its 51 blocks in the country, Prachur Sah, deputy chief executive of Cairn, said in an interview to Bloomberg TV Friday.
“Our target is to reach half a million production in a very short time by doing these investments,” he said.
“This investment is not just a number, but we have projects in line. We are looking at exploration heavily over the next few years to get to these levels.”
Cairn’s plan stands out compared to other producers around the world, most of whom are staying away from committing investments in oil and gas, leading to a sharp increase in prices as rebounding demand outstrips supply.
This is affecting import-dependent nations such as India, which meets 85 per cent of its oil needs through overseas purchases, prompting the government to push explorers to expand their oil hunt.
The company produces a quarter of India’s overall oil and aims to raise the contribution to 50 per cent of the country’s total output, its website says.
Cairn’s average production stood at 159,000 barrels of oil equivalent during three months that ended on December 31.
“We are working with the government to see how policies can be made conducive in oil and gas, and get the production increased to where it can be sustainable to manage the domestic requirements,” Mr Sah said.
The company has invested about $2.5bn in the past three years when big producers around the world withheld spending after oil prices fell. Cairn has made a few oil and gas discoveries recently and expects to strike more as it steps up exploration.
The oil producer remains committed to meeting its carbon-neutral target of 2050 even with an increase in fossil fuel production.