New Delhi, Aug 2 - Cairn India, part of the British oil explorer Cairn Energy, will start crude oil production from its Mangla oil fields in Barmer, Rajasthan, from the second week this month, a top official said Sunday.

'The company has reached pricing agreements with principal buyers Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals (MRPL),' said Rahul Dhir, chief executive of Cairn India.

Rajasthan, which has the largest onland oilfields in the country, will have a peak output of 8.75 million tonnes crude per annum, contributing one-fifth of the nation's total output, Dhir said.

'It will save around $6.8 billion foreign exchange per annum which is around 7 percent of the total oil import bill of the country.