In an effort to diversify its portfolio, the Anil Agarwal-led Cairn India Ltd is looking to enter the downstream gas infrastructure business through a joint venture with GAIL India Ltd and Rajasthan State Petroleum Corp Ltd (RSPCL).
The downstream sector commonly refers to the refining of petroleum crude oil and the processing and purifying of raw natural gas, as well as the marketing and distribution of products derived from these.
GAIL and RSPCL had signed a memorandum of understanding last year for supply of natural gas in Rajasthan. Cairn India and its partner Oil and Natural Gas Corp (ONGC) on Saturday commenced commercial sales of gas from their Rajasthan block.
"We have already shown our interest to be a part of this joint venture," P Elango, a board member of Cairn India said, referring to the GAIL-RSPCL project. Besides, Cairn India is also planning to invest Rs 6,000 crore on exploration and development activities in its Rajasthan field in 2013-14.
Asked about reports that the company was looking at buying Cairn Energy's stake, Agarwal said: "At the moment, we are focused on India. Cairn Energy's 10 per cent stake in Cairn India is insignificant. We will buy it out in due course of time."
The company also started production from Aishwaryia field here. The Rajasthan block (RJ-ON-90/1) is India's largest onshore field. Aishwariya is the third-largest discovery in the block.The initial commercial volumes will be about 5 million standard cubic feet (mscf) per day.
"The company's gross investment in Rajasthan till now is Rs 18,000 crore and we plan to invest over Rs 6,000 crore in exploration and development activities," said Elango.
The RJ-ON-90/1 block currently produces about 30 mscf of gas per day from the Raageshwari Deep Gas field and as associated gas along with crude oil from the Mangala and Bhagyam fields. This production is currently being used to meet the energy requirements at the Mangala Processing Terminal and the 600-km crude oil pipeline primarily for the purpose of heating the waxy crude produced from the block.
ONGC has 30 per cent stake in the block. Following the government's decision to allow further exploration, the Cairn-ONGC joint venture recently commenced drilling of an exploration well after a gap of more than five years in the Barmer Basin.
Cairn is planning to explore 150 wells in Rajasthan in the next three years.