Cairn lines up $760 m for 2 yrs

Allots $560 mn for Rajasthan operations.

Britain's Cairn Energy will invest $760 million in two years for oil exploration and production activities in India. The company has also allotted $560 million for its Rajasthan operations.

The risk capital of $200 million will also be invested in the various oil and gas assets across the country.

"We will continue to be a long term investor in India. In the next two years, we are planning to invest $200 million risk capital in the country. Around 70 per cent of the $800 million development capital fund will be diverted towards the first production from Rajasthan."

"The company estimates its Rajastan unit to produce more than 3.5 billion barrels of oil, higher than the previous estimate of about 2.5 billion barrels," an industry source said.

Couple of weeks ago, Cairn had announced that it was considering a part float for funding its exploration and production activities in India.

This public issue is expected to hit the capital market by 2008, before its main Mangala field in Rajasthan begins production. Sources said the amount to be raised would be determined by the then prevailing market conditions.

"The company is eyeing share in the blocks being offered under the New Exploration Licensing Policy (NELP). In the last decade, Cairn has invested over $1.3 billion in the KG Basin, Gulf of Cambay and Rajasthan, and has developed commercial reserves of over 500 million barrels. In the Rajastan field, production is expected to start by 2007," sources close to the development said.