Cairn Oil & Gas sees “large untapped potential” in India’s northeast and plans to expedite exploration activities in the region in the coming fiscal year, Chief Financial Officer (CFO) Hitesh Vaid told Moneycontrol in an interview.
In 2025-26, Cairn Oil & Gas plans to drill at least six wells in its Assam block, he said. The company has already been drilling in the area and is optimistic that the region will become its next hub.
“We have been conducting exploration in this (Assam) block for the last few quarters and have drilled a few wells. Based on our findings, we believe there is significant untapped potential in the northeast,” Vaid said.
“We are quite bullish on the northeast becoming our next hub, and our vision is to create a growth story similar to what we achieved in Rajasthan. In the northeast, we have one block that is already producing close to 1,000 barrels per day (bpd) of oil equivalent. We recently announced an investment in the northeast, but it remains a potential investment. We still need to ensure that we discover oil and successfully monetize it,” 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 plans to use this investment to establish oil and gas exploration and production facilities in these states, Agarwal stated. The company currently operates 12 blocks acquired under the Open Acreage Licensing Policy (OALP) and one under the Discovered Small Field Policy in Assam and Tripura.
50% Contribution Toward Domestic Production
Cairn Oil & Gas has set an ambitious target of contributing 50% of India’s total oil and gas production. Vaid stated that the company would leverage its extensive portfolio of blocks to meet this goal.
With the government opening up more acreages for exploration, the company aims to expand its portfolio while ramping up production from its existing mature fields.
“We have 62 blocks, and in the OALP-IX round, whose results will be announced soon, we plan to add more acreages. OALP-X, India’s largest bidding round so far, focusing on deep-water and ultra-deep-water exploration, has also been announced. We will actively participate in it. Having a diverse portfolio will be key to reaching our 50% production target. Our portfolio consists of both onshore and offshore assets, ensuring it is not concentrated in just one location,” Vaid said.
While pursuing new blocks, the company is also focused on optimizing production from existing ones. Vaid highlighted that the company is prioritizing tight oil—crude oil trapped in low-permeability rock formations—from its flagship Rajasthan block.
“Our focus is on maximizing output from our existing fields. In Rajasthan, we have a significant tight oil discovery. Until now, we had been targeting conventional oil, but with conventional oil production declining, we are now shifting our focus to tight oil,” he said.
Seeking Global Partnerships
To venture into deep-water and ultra-deep-water exploration, Cairn Oil & Gas is engaging with global players to acquire advanced technology and equipment. In the upcoming fiscal year, the company plans to drill three to six wells in its Krishna-Godavari Basin block.
“A lot of global operators are re-entering the oil and gas sector after shying away from it in recent years. These players are looking for investment opportunities, and India is one of the few countries actively encouraging investments in the sector. Many of them are keen to enter the Indian market,” Vaid noted.
On March 12, the Lok Sabha passed the Oilfields (Regulation and Development) Amendment Bill, 2024, aimed at ensuring policy stability, enabling international arbitration, and extending lease terms to attract foreign investments in India’s exploration sector.
Vaid expressed confidence that international players would invest in India due to the government’s continued efforts to create a favorable investment environment, coupled with a global shift toward increasing oil and gas production.
“The Indian government has been making significant efforts to create a positive business environment in the oil and gas sector, making India an attractive destination for foreign investors who had previously been hesitant. It’s not just about the Oilfields (Regulation and Development) Act but also the broader policy changes in recent years,” he said.
He also pointed out the changing global outlook: “With the shift in the U.S. administration, everyone is now talking about increasing oil and gas production. The focus is no longer on choosing between oil and gas or alternative energy sources, but rather on using all available options.”
The global oil and gas industry has been ramping up investments, with former U.S. President Donald Trump advocating for increased production and pushing companies to boost output.
(The article was originally published on moneycontrol)
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