While the country currently imports 2,000,000 barrels of oil per day (bopd), its domestic production is around 650,000 bopd.
Sources close to the development told FE that the peak production from Mangala oilfields in Barmer district would be around 25% of the countrys present production. This would definitely help in bringing down imports from West Asia and West Africa, which are exposed to volatile prices, freight charges as well as political risk.
The countrys oil imports bill has already crossed $20 billion and has a huge impact on the economy.
Cairn India sources said work in developing the oilfield in Rajasthan is on the fast track with integrated upstream and midstream development on course.
Earlier, Rahul Dhir, chief executive, who heads Cairn India, said: We expect to produce first oil from Mangala in the second half of 2009.
Sources said two drilling rigs, which would be used for extracting Cairns discoveries in Rajasthan, have already been shipped from Texas and are expected to reach the Haldia port later this week.