Cairn India (CIL) today reported a 10-fold jump in its quarterly net profit on back of higher crude oil price and consistent performance at the nation's biggest onshore oilfield in Rajasthan.
Consolidated net profit in the fourth quarter through March rose to Rs 2,457.79 crore from Rs 245.19 crore an year earlier, the Indian unit of Edinburgh-based Cairn Energy Plc said in a statement here.
While 2010-11 was the first full year of safe and consistent operations at Rajasthan oil fields, Cairn realised $94.2 a barrel for oil produced in January-March quarter as opposed to $71 a barrel the previous year.
Mangala, the biggest oilfield in the Rajasthan block, is currently producing 125,000 barrels per day but has potential to go up to 150,000 bpd without any new investment. But the oil ministry has for unknown reasons held back approval for raising output for nearly a year now.
"Our enhanced understanding of the Mangala reservoirs, following development drilling in the field, indicates a production potential of 150,000 bpd, subject to joint venture (partner ONGC) and government approval," Cairn said.
With Mangala field consistently producing at approved plateau rate of 150,000 bpd, it is now focussed on the second phase of Rajasthan development.
Bhagyam field, the second largest find in Rajasthan, is likely to be put into production in October and will reach plateau production of 40,000 bpd by the calendar year-end.
"We are now focused on the second phase of the Rajasthan development to reach the currently approved plateau production of 175,000 bpd, which will account for 20% of the country's crude production," Cairn said.
Further, Cairn plans to put into production Aishwariya field in 14-months from the date it receives necessary government sanctions.
Aishwariya will produce 10,000 bpd sometime in second half of 2012 calendar year and together with 150,000 bpd of Mangala and 40,000 bpd of Bhagyan, total output from Rajasthan would be 200,000 bpd (10 million tonne a year).
"In addition to the above, the enhanced oil recovery (EOR) pilot project in Mangala which commenced in early 2010 is progressing as per expectations. The successful implementation of EOR in Rajasthan has the potential to increase recoverable reserves by more than 300 million barrels of oil equivalent (mmboe), and materially extend the duration of the plateau production," the statement said.
Cairn said it has sale arrangements in place for 155,000 bpd of oil from Rajasthan and it is in discussions with the government for finding buyers for additional volumes.
"Our current understanding of the resource base in Rajasthan supports a vision to produce 240,000 bpd; equivalent to a contribution of about 35% of India's current crude production, subject to further investments, joint venture and regulatory approvals," Cairn said.
"However, it should be noted that our ability to ramp up to these levels requires active support of the government and JV partners (Oil and Natural Gas Corp)," it added.
Revenues rose to Rs 3,654.47 crore in Q4 from Rs 692.83 crore in the corresponding period in the previous fiscal.
Net profit jumped to Rs 6,334.40 crore in 2010-11 fiscal from 1051.10 crore in the 2009-10 financial year. Revenues soared to Rs 10,277.93 crore as opposed to Rs 1,623.03 crore.
Average daily gross operated production in FY11 was 149,103 barrels of oil equivalent. The average crude oil price realisation in FY11 was $79.1/bbl and the average gas price was $4.55 per thousand cubic feet.
"Cairn India's continued focus on safe and efficient operations has helped us to quickly ramp up the Mangala production to 125,000 bpd and deliver almost 40 million barrels of crude oil to Indian refineries," company's Managing Director and Chief Executive Officer Rahul Dhir said.
"The successful delivery of the large scale Rajasthan project, the continued focus on life cycle planning and low cost operations in Rajasthan, Ravva and CB/OS-2 along with the application of innovative technologies has created a strong foundation for our future growth," he said.
Cairn is now ready to begin drilling in the frontier Mannar Basin in Sri Lanka later this year.
