Operational Review
During FY 2024-25, Oil & Gas business delivered gross operated production of 103 kboepd, down by 19% Y-o-Y, primarily driven by natural reservoir decline at the MBA fields. The decline was partially offset by addition of volumes through new infill wells brought online and well intervention activities in Mangala, Aishwariya, Tight Oil (ABH) and Raageshwari Deep Gas fields. OALP assets were supported by ramp up of volumes from Jaya discovery.
Average gross operated production across our assets was 19% lower Y-o-Y at 1,03,237 boepd. The company’s production from the Rajasthan block was 84,276 boepd, 21% lower Y-o-Y and from the offshore assets, was at 15,156 boepd, 23% lower Y-o-Y. The natural decline has been partially offset by infill wells brought online across fields in Rajasthan, well intervention activities across assets and ramp up volume from Jaya discovery.
Gross production from the Rajasthan block averaged 84,276 boepd, 21% lower Y-o-Y. The natural decline in the MBA fields has been partially offset by infill wells drilling campaigns and well intervention activities in Mangala, Aishwariya, ABH and RDG fields.
Gas production from Raageshwari Deep Gas (RDG) averaged 114 million standard cubic feet per day (mmscfd) in FY 2024-25, with gas sales, post captive consumption, at 100 mmscfd.
The appeal against the Division Bench order (additional 10% profit sharing from 2020 onwards) was filed by us before the Supreme Court in June 2021. The matter was listed on 27 March 2025. However, the matter could not be heard due to paucity of time. We await the next date of hearing.
The Government of India (GoI), acting through the Directorate General of Hydrocarbons (DGH), had raised demand up to 14 May 2020 for Government’s additional share of Profit oil based on its computation of disallowance of cost incurred over retrospective re-allocation of certain common costs between Development Areas (DAs) of Rajasthan Block and certain other matters aggregating to US$ 1,162 million applicable interest thereon representing share of Vedanta Limited and its subsidiary.
The Group had disputed the aforesaid demand and invoked arbitration as per the provisions of the Production Sharing Contract. The Group had received the Final Partial Award dated 22 August 2023 from the Arbitration Tribunal ('the Tribunal') as amended by orders dated 15 November 2023 and 08 December 2023 ("the Award"), dismissing the Government’s contention of the additional Profit Petroleum in relation to allocation of common development costs across Development Areas and certain other matters in accordance with terms of the Production Sharing Contract for Rajasthan Block, while allowing some aspects of the objections. Further, the Tribunal had decided that the Group was allowed to claim cost recovery of exploration cost as per terms of the Production Sharing Contract.
Pursuant to the award, the Group had recognised a benefit of ₹ 4,761 crore in Revenue from operations in financial year ended 31 March 2024. The Group has been adjusting the profit petroleum liability against the aforesaid benefit.
GoI had filed interim relief application on 03 February 2024 stating that the Group has unilaterally enforced the award although the quantification of the same is pending. The matter was heard on 26 March 2024 and the Tribunal vide its order dated 29 April 2024 has denied GoI's interim relief application in favour of the Group. GoI has filed an appeal before the Delhi High Court (“Section 37 Appeal”). Hearing has been concluded in the matter and parties have filed written submission on 16 April 2025. Judgement on the matter is reserved. In the interim, vide letter dated 06 May 2024, GoI has submitted its calculation of the quantum, basis the Award. GoI has claimed a sum of US$ 224 million from the Group. The Group is of the view that the GoI computation is prima-facie contrary to the Award including clarifications issued by the Tribunal. The Tribunal has allowed these costs for cost recovery, but this was not considered by GoI in their calculation of the quantum. The Group has responded to the GoI with its detailed analysis and is awaiting a response.
GoI had also filed a challenge against the Award on 07 March 2024 in Delhi High Court. Notice has been issued on 01 August 2024 in Section 34 and granted liberty to the Group to file its response. Further, no stay has been granted to GoI against the adjustment of liability by the Group. We await the next date of hearing. The Group believes that the Court may not re-appreciate the evidence in Section 34 appeal as the interpretation by the Tribunal is plausible.
The Ravva block produced at an average rate of 10,104 boepd, lower by 7% Y-o-Y, owing to natural field decline.
The Cambay block produced at an average rate of 5,052 boepd, lower by 43% Y-o-Y, owing to natural field decline.
Crude oil prices averaged US$ 78.9 per barrel in FY 2024-25, a decrease from US$ 83.1 per barrel in FY 2023-24. This decline was mainly driven by geopolitical risks, slowing economic growth in developed economies, potential tariffs by the United States, and rising inventory stocks.
Early in the year, prices increased due to escalating Middle East tensions and OPEC's supply cuts. However, as geopolitical risks eased and global monetary policy uncertainties grew, prices shifted downward, largely due to concerns over slowing economic growth in major economies like the U.S., China, and Europe.
Later in the year, prices briefly spiked due to rising tensions between Israel and Iran, raising fears of disruptions to Iranian oil exports. However, weaker demand, especially from China, a build-up in U.S. petroleum product inventories, a stronger U.S. dollar, and potential tariffs on imports from Canada, Mexico, and China exerted downward pressure.
Crude oil prices were influenced by ongoing geopolitical tensions, economic uncertainties, and potential U.S. sanctions, while supply-side risks and seasonal factors caused occasional price fluctuations. In April, crude prices dropped following announcements of new U.S. tariffs and retaliatory measures from major economies, triggering heavy selling in oil futures and broader financial markets.
The Oil & Gas business has a strong portfolio of infill development and enhanced oil recovery projects to boost near-term volumes and manage natural field decline. Key projects include:
Revenue for FY 2024-25 was ₹ 11,044 crore, a 38% decrease Y-o-Y (after profit petroleum and royalty sharing with the Government of India), primarily due to lower volumes and prices. The previous year included a favourable impact from an order received in the GoI arbitration. EBITDA for FY 2024-25 was ₹ 4,664 crore, down 52% Y-o-Y, reflecting the lower revenue.
The Rajasthan operating cost was US$ 16.6 per barrel in FY 2024-25, up from US$ 14.5 per barrel in FY 2023-24, mainly due to reduced production.
Our Oil & Gas business is committed to protecting the environment, minimise resource consumption and drive towards our goal of ‘zero harm, zero waste, zero discharge’. Highlights for FY 2024-25 are as under:
There was one fatality and one lost time injury (LTI) in FY 2024-25. Loss time injury frequency rate stood at 0.03 per million-man hours (FY 2023-24: 0.1 per million‑man hours).
Cairn Oil & Gas has taken various initiatives:
Our focus remains on strengthening our safety philosophy and management systems. We were recognised with awards conferred by external bodies:
