NEW DELHI: Britain's Cairn Energy said Wednesday it planned to invest up to another 1.3 billion dollars in its giant Indian oilfield that comes on stream on Saturday.

The company, which began work in the desert area of Rajasthan over a decade ago, said it hoped to make other discoveries around its existing fields which are set to increase India's crude output by 20 percent at their peak.

"A lot of innovation and clever thinking around the basin we hope will lead to further discoveries" and increase the oil that can be recovered from the fields, said Rahul Dhir, chief executive of Cairn's India unit.

Cairn has spent two billion dollars developing the fields and expects to invest another 1.1 billion to 1.3 billion dollars in the next couple of years as it raises output, he added.

Cairn aims to begin pumping a few thousand barrels a day from the field as it tests its systems, ramping up to 30,000 barrels within months.

The peak production target of 175,000, equivalent to 20 percent of India's current output, would be hit in 2011, Dhir said. The life of the fields was estimated at 40-50 years.

The fields contain some 3.5 billion barrels of oil, "of which we believe we can recover one billion," said Dhir.

"We are dedicating the Mangala field to the nation. This is a world-class resource," Dhir told reporters on a conference call.

India's Premier Manmohan Singh is to push the button to begin production on Saturday at a ceremony seen as underscoring the importance of the fields to the country's energy security.

India, which imports 70 percent of its oil needs, has been frantically racing to discover new sources of energy to fuel its rapidly growing economy.

Cairn began buying out the rights to Shell's oil blocks in Rajasthan in 1997 after the Anglo-Dutch oil giant concluded they had little potential.

Cairn's founder and chairman Sir Bill Gammell was convinced the company would strike black gold in the desert and was vindicated with the Mangala discovery in 2004.

The oil find was the biggest in India in over two decades.

The company will initially transport the oil by truck but aims to complete a 700-kilometre (430-mile) pipeline by year end that will be the longest heated pipeline in the world.