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PM invites more FDI in energy

Dedicates Cairn India’s Mangala oilfields to the nation,says investment climate favourable....

Written by ENS Economic Bureau | Barmer |
August 30, 2009 2:09:41 am

With the demand for energy growing rapidly in India,Prime Minister Manmohan Singh on Saturday invited foreign investors to invest in the country and extended all support to facilitate their entry. “The achievement by Cairn India shows that there is a favourable condition for foreign direct investment in India and I invite investors across the world to come and invest in the country. All possible support will be extended by the government to the investors,” the Prime Minister said while dedicating Cairn India’s Mangala oilfields to the nation.

“A lot needs to be done to eradicate poverty. We need higher rate to achieve this. The need for energy demand in the country is growing at a rapid pace and history has shown that any country with good reserves of oil and gas has flourished,” Manmohan Singh said.

Singh’s invitation to global investors assumes significance as on August 8,the government had kicked off the New Exploration Licensing Policy (NELP) VIII,the largest ever auction of oil and gas exploration areas. The government is offering 24 deep-sea blocks,28 shallow water blocks,18 onland blocks 10 coal bed methane (CBM) blocks for bidding in NELP-VIII hoping to attract $3 billion investment in exploration and boost energy security in the country. Roadshows are currently going on in various cities across the world.

Cairn on Saturday started pumping crude from the Mangala oil field in the Rajasthan block,the first major crude oil discovery in two decades. Mangala’s peak production of 125,000 barrels per day (bpd) will be reached in the first half of 2010. Along with the production at its Bhagyam and Aishwarya fields,the aggregate peak production by Cairn India will be 175,000 bpd or 20 per cent of India’s domestic production.

The three fields are expected to save the country $1.5 billion annually as import bill over the next 10 years. It would also earn the government $30 billion across the life of the field by way of taxes,royalties and profit petroleum. Cairn India and Oil and Natural gas Corporation (ONGC) own the oilfields in Rajashan in a 70:30 ratio. Petroleum Minister Murli Deora said the Central government would get Rs 46,000 crore as profit petroleum revenue. The Rajasthan government would get another Rs 12,000 crore as royalty revenue for the first five years,he said.

“In 2004,when we came here,it was a desert. But I was sure of the enormous potential of this oilfield. Our view has been vindicated,” said Cairn India chairman Bill Gammell. Cairn Energy PLC of the UK holds 65 per cent stake in Cairn India.

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