Cairn will begin oil production from Bhagyam at the level of 20,000-25,000 barrels per day sometime next month
State-run Oil and Natural Gas Corp (ONGC) and the Oil Ministry's technical arm, the DGH (Directorate General of Hydrocarbon), have given Cairn India the go-ahead for commencement of production from the Bhagyam oilfield, the second-largest find in the prolific Rajasthan block.
Cairn, which was recently taken over by London-based mining group Vedanta, will begin oil production from Bhagyam at the level of 20,000-25,000 barrels per day sometime next month and it will reach the approved peak output of 40,000 bpd by April, sources privy to the development said.
ONGC, which holds a 30% stake in the Rajasthan block, had asked for third party certification to ascertain if Cairn's production plan will prudently exploit the reserves and if the surface facilities are capable of handling oil and water from the field.
Sources said third party certification endorsing the production plan came in a few days, after which ONGC gave its go-ahead for commencement of production.
Prior to this, the DGH had approved the production plan, they said, adding that the FY'12 production rate, work programme and Budget for the Bhagyam field would now be put up to the block oversight committee for approval.
Management Committee approval of the same is expected in 7-10 days, after which Cairn would looking at beginning output from Bhagyam.
Currently, Mangala—the biggest of the 18 oil discoveries in the Thar desert block— is producing 125,000 bpd, but it can produce 150,000 bpd within a few days from MC approval. Bhagyam, too, has the potential for output to go up to 60,000 bpd, sources said, adding that the Rajasthan block would have an output of close to 175,000 bpd by the end of the current fiscal.
Cairn, which is the operator of the Rajasthan block with a 70% stake, was ready to pump oil from Bhagyam in October, but delayed the production in the absence of regulatory approvals. So far, the company has committed more than $250 million toward development of Bhagyam against the approved Field Development Plan estimate of $470 million.
The approvals for the Bhagyam field were delayed because of a dispute over payment of royalty and oil cess with partner ONGC. But now that UK's Cairn Energy, which sold 40% of its stake in the Indian unit to the mining group, and Vedanta have agreed that Cairn India will share royalty and pay cess on its 70% share in the block, the approvals have started flowing.
Sources said the Rajasthan block has the potential to produce 300,000 bpd, a quarter more than the previously projected peak output. Besides enhanced output of 150,000 bpd from Mangala and 60,000 bpd from Bhagyam, the Aishwariya field in the block can contribute 25,000 bpd, compared to 10,000 bpd previously estimated.
The other fields in the block can produce 65,000 bpd.
Sources said the Bhagyam field is ready to start production, while output from Aishwariya will begin in 2012. At present, the approved peak output from Rajasthan is just 175,000 bpd—made up of 125,000 bpd from Mangala, 40,000 bpd from Bhagyam and 10,000 bpd from Aishwariya.
For the new peak, the government needs to approve field development and investment plans along with the extension of exploration activities over the rest of the block.
Cairn India holds 70% participating interest in the block and ONGC the remaining 30%.
On Monday, ONGC closed at Rs262.25 per share on the Bombay Stock Exchange, 0.27% up from the previous close.
NHAI had awarded the project to IRB Infrastructure in January 2010 for four laning of Goa-Karnataka border to Panaji-Goa stretch on BOT toll basis
IRB Infrastructure Developers said the National Highways Authority of India (NHAI) has cancelled a contract awarded to it for four laning of a road in Goa.
"The company has received a formal letter from NHAI informing the company, termination of this concession agreement of the project due to their inability to provide necessary land for implementation of the project," the company said in a filing to the Bombay Stock Exchange (BSE).
NHAI had awarded the project to IRB Infrastructure in January 2010 for four laning of Goa-Karnataka border to Panaji-Goa stretch on BOT toll basis. To execute the project a special purpose vehicle, IRB Goa Tollway, was formed, it said.
The concession agreement with NHAI was executed in February 2010 and financial closure was achieved in March 2010, it added. However, NHAI failed to provide necessary land for implementing the project. Finding delays in getting land, the statement said, IRB Infrastructure Developers in September this year removed the project from its order book.
On Monday, IRB Infra closed at Rs141.85 per share on the Bombay Stock Exchange, 1.5% up from the previous close.
Havells India said that the initial investment would be $50 million, which after around three years will go up to $100 million
Electrical goods maker Havells India said it, along with a Chinese partner will invest up to $100 million (nearly Rs530 crore) in the next three years to set up a manufacturing facility at Jiangsu province in China.
The new facility will come up under a 50:50 joint venture, Jiangsu Havells Sylvania Lighting Co Ltd, with China’s Shanghai Yaming Lighting Co. "The initial investment would be $50 million, which after around three years will go up to $100 million," Havells joint managing director Anil Gupta told reporters.
The plant will start initial commercial production in April 2012 and will have full swing output by November next year, he added. The JV firm will produce lighting products like HID lamps, LEDs, CFLs and lighting fixtures, he added.
Initially the company plans to export products wherever the Sylvania brand is sold currently and the later would also cater to the Chinese market, Gupta said.
At present Havells sells the Sylvania brand, which it had acquired in 2007, mainly in Europe and Latin America. It has also been gradually expanding in West Asia and Africa. The JV expects revenues of $30 million in the first year itself and $100 million in the next three years, he said.
"Though we had presence in China in R&D space, the need for a manufacturing base was always there," Gupta said. In India the company has eight facilities located in Rajasthan, Uttarakhand, Uttar Pradesh, Himachal Pradesh and Haryana.
On Monday, Havells closed at Rs397.95 per share on the Bombay Stock Exchange, 3.46% up from the previous close.