Mining mogul Anil Agarwal has said his company Vedanta Ltd will invest over $6 billion to double oil and gas production to 4,00,000 barrels per day in 3-4 years, but wants the government to extend its Rajasthan oil field licence without any condition.
He also wanted the government to allow export of crude oil produced from the Barmer fields in Rajasthan to discover the right price. “I have a feeling that the world does not want India to produce oil. They want to keep supplying oil to India,” he told PTI in an interview.
Agarwal, who was one of the two dozen CEOs of top global and Indian firms to have brainstormed with Prime Minister Narendra Modi on ways to increase domestic output yesterday, said that India has about 70 billion barrels of resources that can be produced for 35 years.
Right policies and unencumbered clearances, according to Agarwal, should be given without delays. “I feel that except for environmental clearances, there should be no other clearance required,” he said.
Vedanta, which in 2011 bought Cairn India from its British promoters at an enterprise value of $14.5 billion, has “not recovered the money spent on the acquisition”, he said.
“But we are investing more. We are determined to double the oil and oil equivalent of gas production to 4,00,000 barrels per day in 3-4 years,” he said. “We are investing ₹40,000 crore more in Rajasthan and other fields.”
During first half of the current fiscal, Vedanta Ltd produced over 1,84,000 barrels of oil and oil equivalent gas (boepd). The Rajasthan block produced 1,56,278 boepd.
Agarwal suggested that the government should extend the Rajasthan field contract beyond the current tenure ending May 2020, without any preconditions.
“Asking for 10% more profit petroleum (for extension) will make it unviable,” the Vedanta chief said.
The government had earlier this year decided to give 10-year extension of producing licence provided an additional 10% from the profit earned from the oil and gas field is given to it.
“The extension should have been automatic. People will come and invest only when policies and conditions are not changed mid-way,” he said.
Agarwal said crude from Rajasthan is currently sold at a discount of 15% of what similar quality crude oil gets in the global market.
“We are not going to actually export, but if we have an export permission, the domestic buyers will have to match the best price such crude oil will get,” he said, adding that the government would be the biggest beneficiary as 80% of the price realised goes to it in the form of taxes and statutory levies.
Vedanta today produces 27% of India’s crude oil production and “we want to do 50% for which we need enabling policies”, he added.