Cairn to up oil output share to 30% in 4 years

Cairn Energy expects to increase its share in India's oil production from the existing 8 per cent to 30 per cent in another four years. The company's current operated production in India stands at 87,000 boepd (barrels of oil equivalent per day).

Cairn Energy India has received approvals for the developments of the Mangala, Aishwariya, Saraswati and Raageshwari fields in Rajasthan and will allocate $850 million out of the total bank facility of $ 1 billion, for funding development work on these fields.

The company has planned a capital expenditure of $450 million for this year.

The Indian operations of Cairn Energy contributes 90 per cent to the valuation and 50 per cent to the profit of the Edinburgh-based oil and gas exploration and production company, according to Rahul Dhir, CEO of the Indian business.

The London Stock Exchange-listed Cairn Energy Plc posted revenue of $262.6 million in 2005, 5.7 per cent higher than the previous year's $172.9 million.

It's profit after tax stood at $79.1 million against net loss of $15.7 million. The company's net assets and net funds stood at $ 757.6 million and $ 95.5 million, respectively, at the end of 2005.

Dhir said that the foreign parent Cairn Energy Plc would go in for an initial public offer by the end of this calendar year or early next year to increase the involvement of local stakeholdings in the company. " Money is not the primary objective for the company's plan to go public.

This is part of the company's Indianisation process. We want to share our prosperity with Indian stakeholders, " he said.

Cairn hit the headlines in India in January 2004 when it finally struck black gold at the Mangala field.

It was the largest oil discovery in onland India since 1985 when ONGC located more than a billion barrels of in-place oil reserves at Gandhar in Gujarat.

Mangala, located at the Barmer-Sanchore basin, is expected to contain more than a billion barrels, of which up to 250 million barrels is thought to be recoverable. The oil, which is trapped in a large simple structure at relatively shallow depth, could produce 10,000 barrels per day on production.

The importance of the Mangala find becomes clearer considering the fact that it represents a quarter of the reserves of Bombay High, and the total discoveries in India in the last two years amounted to around 800 million metric tonne of oil and oil equivalent gas.