New Delhi, Aug 26 - In a major boost to India's quest for energy security, Prime Minister Manmohan Singh will Saturday kick off Cairn India's oil production from Rajasthan's Mangala fields, the site of the country's largest oil discovery in two decades.

According to Cairn India, the peak output from the wells at Mangala will amount to 125,000 barrels per day (bpd). Along with the production at Bhagyam and Aishwarya fields (also in Rajasthan), the aggregate peak production will be 175,000 bpd or 20 percent of India's domestic production - enough to power 3.4 million cars daily or fill up 4.5 million cooking gas cylinders a month.

The country imports over 70 percent of its crude oil needs. 'We estimate that it (the 175,000 bpd) will alleviate imports by 8 percent,' said company chief executive and managing director Rahul Dhir in a conference call Wednesday.

The three fields are expected to save the country $1.5 billion annually as import outgo over the next 10 years. It would also earn the government $30 billion across the life of the field by way of taxes, royalties and profit petroleum.

'We will gradually ramp up production in Mangala from a few thousand to 30,000 barrels per day (bpd),' Dhir added.

Mangala's peak production of 125,000 bpd will be reached in the first half of 2010.