Vedanta Resources Plc, the parent company for VedantaLtd and Cairn India Ltd is also confident to complete the planned merger of Cairn India with Vedanta in the March quarter. “We continue to remain on track with the Cairnmerger, expected to achieve it in the first quarter of calendar 2017. Everything is going by the book as far as approvals are to go,” said Tom Albanese, chief executive office, Vedanta Resources Plc. Albanese was talking on the sidelines of the Petrotech Summit in Delhi.
In September, shareholders of both the companies approved a revised merger of Cairn India with Vedanta. In a bid to sweeten the deal, in July, Vedanta and Cairn India announced a revised deal in which Vedanta offered minority shareholders of Cairn India one equity share and four redeemable preference shares with a face value of Rs 10 each. The merger is now at the regulatory approval stage.
On the investment plans in the oil and gas sector, Albanese said, “As we see oil prices begin to stabilise and our engineers are working on crude efficiency in projects we are looking at numerous projects and we hope to see investments begin during the course of the next financial year.”
Boston Consulting Group (BCG) in a report released at Petrotech said in the current oil price scenario Indian oilcompanies could leverage their financial strength to selectively invest in resources where foreign upstream players are financially squeezed. The recent historic Opec meet over cut down in production may help push up prices, however, prices are unlikely to see the highs of $100 per barrel.
On December 2, Business Standard reported Vedanta is looking to invest Rs 30,000 crore in CairnIndia to increase capacity from the current 200,000 barrel per day (bpd) to 350,000 bpd of oilequivalent. Cairn India has bid for two blocks under the auction for small fields that concluded on November 21, 2016. The bids are currently being scrutinised.
The company has earmarked a net capital investment of $100 million for 2016-17, including 20 per cent for exploration activities and 80 per cent for development of Rageshwari Deep Gas project and completion activities of Mangala enhanced oil recovery. The gross production from Rajasthan for FY17 is expected to be maintained at FY16 level.
“Efforts are ongoing to further improve the economics of key projects – Bhagyam and Aishwariya EOR, Barmer Hill and Satellite Fields, at low oil prices and the pre-development investment is underway to ensure project readiness for the development with grant of extension of production sharing contract,” the company had said on October 21, 2016.