Marking a milestone in two decades, Cairn India will begin crude oil production from its Rajasthan desert field of Mangala next month, helping the energy-deficit nation cut imports.
"We are operationally ready to commence oil production in August," the Cairn CEO, Mr Rahul Dhir, said.
More than six decades after India gained independence from Britain, a unit of UK's Cairn is helping India boost its oil production of around 680,000 barrels per day (bpd) by over a quarter.
Cairn's Rajasthan oil fields will bring down India's oil import bill by $6.8 billion or 7 per cent, Goldman Sachs said, adding that peak output from the fields is likely to be 190,000 bpd (9.5 million tonnes a year).
Cairn has said the output will quickly touch 30,000 bpd by the end of the third quarter this year and reach a plateau of 175,000 bpd (8.75 million tonnes a year) in 2011.
Mr Dhir said pricing negotiations for the initial off-take from Rajasthan crude have been concluded with the government of India nominees which are the Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals Ltd.
The company has drilled 28 wells on the Mangala oilfield in the Rajasthan blocks, out of which 16 have been completed and are ready to start production.
The first processing train of 30,000 barrels per day capacity is ready and the second unit would be ready by the fourth quarter of 2009.