Scottish exploration group Cairn Energy announced today that it is to begin pumping the first oil from its major development in Rajasthan, India.
The oil will begin flowing this week, five years after Cairn first discovered crude there.
From its oilfields in the west of the country, the Edinburgh-based firm will initially pump 30,000 barrels per day, which it hopes to increase to 175,000 barrels a day by 2011. It aims to extract a total of one billion barrels from the location over a period of 40 years.
Once output reaches its full capacity, IndiaÔÇÖs domestic oil output will rise by 20 per cent.
Initially the oil will be exported by truck from the Mangala field, though for full output, which will include oil from the neighbouring Bhagyam and Aishwariya fields, completion of an export pipeline stretching to the coast will be required.
The news is significant for India, which is one of the worldÔÇÖs top 10 oil importers, with the commodity accounting for 31 per cent of its energy consumption. The country currently imports 70 per cent of its oil from abroad.
IndiaÔÇÖs Prime Minister, Manmohan Singh, will attend a ceremony this week, during which he will press a button to start production.
CairnÔÇÖs chief executive Sir Bill Gammell, said in a statement:┬á ÔÇ£We are delighted that production from Mangala in Rajasthan is due to commence this week at a Government of India inauguration ceremony. This is a major milestone for the Cairn Group.
ÔÇ£The current planned plateau production from the key fields is 175,000 bopd and we believe there is substantial scope for further growth from the existing fields, from Enhanced Oil Recovery and the expansion of the resource base.ÔÇØ
Cairn has also begun exploration work in Greenland, with plans to drill an exploration well in 2011.
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