Cairn gets $ 1 bn loan; IPO in Q4 '06/Q1 '07

Cairn Energy, UK, which will float an initial public offering (IPO) in Q4 2006 or Q1 2007, has secured a $ 1 billion banking facility to fund its Rajasthan oil field development plan.

About $ 150 million are provided by World Bank's International Finance Corp in the form of a nine-year-loan while the remaining $ 850 million are from a dozen commercial banks, including ICICI, Cairn said in a press release.

The loan would be used to develop Mangala, Aishwariya, Saraswati and Raageshwari fields at Block RJ-ON-90/1 in Rajasthan.

The company also received final government approval for development plans for the 4 fields. The first oil is expected in end-2008, the release said.

The Mangala, Bhagyam and Aishwariya fields are expected to yield combined proven and probable reserves of 514 million barrels of oil, with up to 685 million barrels of crude ultimately flowing if enhanced oil recovery is implemented.

Cairn, with 70% stake, as operator and ONGC with 30% are co-venturers in the project.

Cairn said work on its IPO (of its Indian business) is progressing and "is well underway and on track to allow the company to meet its aim of listing on the BSEin the last quarter of 2006 or early 2007 subject to market conditions."