Under CSR policy, what interventions the company has made to improve the income of farmers in the region?
In the remote, desert district of Barmer, farmers struggle to earn enough money to support their families. They raise a limited variety of crops and rarely introduce innovation. Cairn's Barmer Unnati project, in partnership with TechnoServe, is working with farmers to introduce new crops and innovate new livelihoods. The project is designed to sustainably increase agricultural income for 10,000 rural households in Barmer. The five-year project is teaching farmers across the region about good agricultural practices, connecting them to high-quality inputs and introducing new agricultural technologies and strategies.
Given the region’s arid conditions, the project emphasizes training on water management techniques. Our horticulture and agriculture program have been scaled up from 1,200 to 2,500 farmers by improving management of water using drip irrigation practices and increasing soil moisture retention through the use of khadins - specialized water harvesting structures. We have helped build 143 such structures over 250 hectares of land. 60 percent of this barren land has now been brought under cultivation. These interventions have allowed farmers to practice multi-cropping and grow cash crops such as vegetables and mushrooms.
How does your Dairy Programme help farmers?
Cairn India has also initiated the Dairy Development Programme, which has helped extend monetary benefits to villagers. Earlier, most of the milk collection was localised and largely managed by private vendors. Cairn India developed a model through which the dairy farmers would benefit and generate more income. Our dairy cooperative program has been expanded; an additional 1,000 households are now enrolled and milk collection has increased to 9,736 liters per day. This project has seen farmers’ income rise in a short period of time.
Women are also an important and integral part of the Dairy Development Programme. Be it taking care of the cattle, feeding the cattle, or ensuring that the milk reaches the dairy centre; women have been driving it all. The programme helps women sustain their socio-economic status in the community.
How does Cairn contribute in transforming the socio-economic landscape of Barmer?
We have really changed the complexion of that region in terms of health, livelihood/income enhancement, education and infrastructure development and agricultural sustainability. While all of our CSR programs make a measurable difference in people’s lives, every once-in-a-while a project comes along that radically alters the way a community shapes its future. The solar micro-grid installed at the village of Meghawalon ki Dhani is one such project. It has brought electricity to this small village of nearly 500 people for the first time since India’s independence. Few things have the power to change the economic potential of a community than electricity.
What are the major challenges ?
Rajasthan is one of the driest state in the country. Water is tough to procure in the arid land of Thar, women need to walk miles to fetch drinking water for their families. Cairn is executing a major sustainability-driven intervention to support the Government of Rajasthan (GoR) in providing safe drinking water to communities in the districts of Barmer and Jalore through Water ATW (Any-time Water) kiosks. Water ATW (Any-time Water) kiosks have been established at a number of access points and the community is provided with pre-paid smart cards with which they can access water at their convenience in a manner similar to the access provided by bank ATM machines.Cairn India currently operates 46 ATW (Any-time Water) kiosks in Rajasthan Gujarat and Andhra, with a best-in-class utilization. Due to the extremely positive community feedback, Cairn is now substantially increasing the scale and scope of the Jeevan Amrit project.
Briefly explain Cairn India initiatives in the areas of community health and skill development.
We are committed to improve the quality of life of communities who live in proximity to our operations through health, education, and skill development programs.Through Project Rachna, special focus has been given to improvement of health, sanitation and general awareness among women. The project stands for Reproductive and Child Health Nutrition & Awareness (RACHNA) and the single point agenda of implementing this project is to ensure woman and child well being. The project is being implemented in three blocks of Barmer district namely - Baitu, Sindhari, Dhorimanna. Maternal and infant health is also given prime importance through our health initiatives like camps, Mobile Health Vans (MHVs) and door-to-door drives.
We are also supporting and contributing to “Beti Bachao Abhiyaan.” Under this campaign we provide a “New Born Baby Kit” to parents of the baby girl born in government hospitals and institutions.
What about Skill Development?
Cairn India identifies and understands the importance of skill development and access to employment opportunities. The Cairn Enterprise Centre (CEC) with its 7 satellite centres has provided skill training, career counselling and linkage to employment opportunities to over 12,000 youth since 2007. In an area such as Barmer, with limited economic opportunities, this training has helped thousands of youth. Cairn Center of Excellence (CCoE) a skills development and vocational training center in Jodhpur provides skill development to local community. We have also established three Cairn NASSCOM Knowledge Centre (CNKC), in collaboration with NASSCOM Foundation for skill development in rural Andhra Pradesh.
The Rural BPO that we had helped establish in 2013 in Barmer city has now reached full capacity and employs 200 youth as compared to 100 last year.
What is production targets for FY 16-17 and what is expected in the current fiscal?
Despite record low oil prices and substantial cut in capex, the company expects to maintain the FY15 production from Rajasthan Block in FY16. Rajasthan Block is a significant contributor to the exchequer through Royalty, Profit Petroleum, Cess and other statutory levies. In FY2015, the Rajasthan block contributed Rs 14,869 crore (US$ 2.4 billion) to the national and state exchequers. Despite record low oil prices, the block contributed Rs 1,958 crores to the exchequer in Q3 FY16.
What are expansion plans for the company and would it open some new oilfields in areas in the next fiscal?
The company is already pursuing a host of key projects. It has progressed well with Enhanced oil recovery (EOR) project at Rajasthan, which is among the largest in world. All the EOR wells have been drilled and completed and the polymer injection volumes are being ramped up. The average EOR production from Mangala reached 19 kboepd as of Q3 FY16. In addition work is ongoing on the Aishwariya Infill and Bhagyam EOR. On the Raageshwari Deep Gas (RDG) gas development project, an agreement has been signed with Gujarat State Petronet (GSPL) for construction of pipeline from RGT to Palanpur which will reduce the capex requirement on part of Cairn.
What is your reaction on the Budget 2016?
Given the global economic headwinds, the new oil order and the Prime Minister’s vision of reduced imports, I was expecting fundamental step change in the Budget towards its approach to the oil and gas industry. One of the most critical pieces of reform for the oil and gas industry was to convert the existing specific cess levy to an ad valorem.
The Budget announcement of a 20 percent ad valorem cess is directionally a right step. However, a lower rate of cess — 5 to 8 percent of realised price of crude oil —would have likely helped stimulate the oil & gas sector; particularly fields which are already producing crude oil. Lower cess rate was imperative as, given the geological landscape, the fiscal burden on the Indian oil & gas sector is very high vis-a-vis other countries. But we accept this as a first step and we hope that not just Cairn but other producers as well will continue to have dialogues with the ministry and the government for a continued improvement in investment climate.
The gas pricing for deep offshore field to get full import parity, is very significant. It is something that the industry has been asking for a long time. So getting full recognition and implementation of that is very noteworthy.
What are the major challenges Cairn India faced so far with regard to energy or taxation policy of the state or Centre?
The oil & gas sector is at crossroads. It is going through a challenging phase and is in need of significant investments. It is imperative that we intensify exploration and production in India, attract investments so that we secure energy supplies, support and create hundreds of thousands of jobs, generate billions in revenue for the industry and government, and as a result stimulate overall economic growth. However, pressures on the sector have grown as prices have continued to fall.
Given the historic low oil prices, numerous governments have facilitated oil & gas companies to sustain exploration and production till global oil & gas market reaches a better equilibrium. We would continue to work with the government and its institutions to ensure that the necessary investments in the sector are not further hampered.