IEW 2025 INTERVIEW: India's Cairn to fast track exploration at existing blocks, pursue new areas

Cairn Oil and Gas, part of the Vedanta Group, aims to fast-track exploration at its deepwater block and existing prospects while acquiring new blocks to achieve a 50% share of India's oil and gas output in the coming years, according to CFO Hitesh Vaid.

Cairn, which holds interests in about 62 blocks, contributes about 25% to India's oil and gas production, Vaid told S&P Global Commodity Insights at the India Energy Week 2025.

According to an investor presentation by Vedanta, Cairn's oil and gas average gross volume production guidance stands at 110,000-120,000 barrels of oil equivalent per day for FY25 ending March 31, 2025. Its gross production for nine months in FY25 stood at 105,500 boe/day.

Cairn's two game-changing projects include drilling at the Krishna-Godavari (KG) basin block and shale exploration at the Rajasthan block.

"Our deepwater KG-DWHP-2017/1 block is on the Eastern side of India, very near to the Reliance and the ONGC KG basin...We have moved ahead, thereby investing in a capex plan to support production, and we have committed to drilling a well there," Vaid said.

The company plans to drill five-six wells in the offshore KG basin block by 2026, according to Vaid.

"We have a lot of data, and based on it, we think it's a sizable resource base," he said.

Cairn acquired this block in an OALP round from the Indian government after Reliance relinquished it. The block had three or four discoveries to its credit a few years ago when it was handed over, Vaid said.

Recently, Cairn struck a deal with EGMS to use an advanced technology called Controlled Source Electro-Magnetic (CSEM) to further de-risk the prospects and prioritize the drill sequence. We will collect that data over the next three months.

In addition, Cairn's Rajasthan block--RJ-ON-90/1, covering about 3,111 square kilometers, is situated in the Barmer district. The company's Mangala discovery there in 2004 is among the largest onshore discoveries in India.

Shale potential

Cairn is looking to explore the shale potential in the deeper graben of Rajasthan, Vaid said.

"Our plan is to drill at least three to six share wells there. We know hydrocarbon potential exists, but now we are aiming to commercialize it," he said, adding that a rig has already been contracted to drill those wells and will be arriving in India soon.

"We expect to be spudding there around end-June," Vaid said.

Meanwhile, the company will continue its drilling program in the Northeast, a new frontier for the company.

"In addition, we are looking at a couple of more prospects in the region, which can be highly rewarding from a geology point of view," Vaid noted.

"We are targeting to spud those in the next six months and follow it up with a couple of appraisal wells," Vaid said.

Cairn's Jaya discovery in Gujarat is already contributing about 3,000-4,000 boe/day, predominantly gas.

"We now have acquired a lot of data around that area, and by May this year, we are spudding there too to drill a couple of more exploration cum appraisal wells, which will open up further opportunities," Vaid said.

"On the East coast, beyond the deepwater, in our Ravva block, we have four or five prospects that are mature. Here we are looking to drill after the monsoon weather window, say, September-October," Vaid shared.

Drilling on the West Coast, however, has been deferred to post-monsoon to target a larger portfolio covering Production Sharing Contracts (PSC) and Discovered Small Fields (DSF) blocks, he noted.

OALP rounds, partnerships

Of the 62 blocks Cairn currently holds, five are under production sharing contracts, 46 are under the Open Acreage Licensing Program, 10 are discovered small fields, and one is a coalbed methane block.

"We are going to add acreage from OALP IX because some of those blocks are coming into our portfolio," Vaid said.

"In addition, OALP X is an interesting round because it has most of the things that we do not have in the portfolio, such as deepwater and ultra-deepwater areas," he said.

Cairn will evaluate these opportunities, and if it makes sense, it will participate in the bid round, Vaid shared.

The 10th round, announced during IEW 2025, offers 25 blocks, six of which are in shallow water, six on land, one in deep water and 12 in ultra-deepwater areas.

Meanwhile, the Oilfields (Regulation and Development) Amendment Bill, approved by the Rajya Sabha last year, is expected to be passed by the lower house of the Parliament of India and will enhance the ease of doing business.

Vaid said many international players will likely want to come in then, and Cairn would like to explore partnership opportunities with some of them for the newly auctioned blocks.