Cairn reduces India’s oil import bill by $ 1.8 b

Thursday, 25 October 2012 00:00 - - {{hitsCtrl.values.hits}}

The exploration and production activities of crude oil by Cairn India, the parent company of Cairn Lanka which is currently exploring oil and gas in the Mannar basin, has helped increase the Government of India’s earnings by US$ 800 million. The company has been successful in reducing the country’s oil import bill by US$ 1.8 billion.

Releasing its second quarter financial results on 22 October, Cairn India said the quarter saw consistent production from the company’s flagship Rajasthan asset. The block continues to produce 175,000 barrels of oil per day (bopd), which is more than 20% of India’s domestic oil production, the report said.

The company also recorded a revenue of US$ 806 million, an increase of 68% compared to the corresponding period last year, and EBITDA (earnings before interest, taxes, depreciation, and amortization) of US$ 621 million, an increase of 66% year on year (YOY). Profit After Tax (PAT) for the second quarter stood at US$ 564 million. Cash flow from operations stood at US$ 510 million (43% increase YOY) while the Net cash stood at US$ 2,360 million as on 30 September 2012.

Elango P., Interim Chief Executive Officer, Cairn India said, following support from the Government of India, the company has received all approvals for its corporate re-organisation. “Implementation of this will help simplify and consolidate the multi-layered structure of CIL comprising foreign subsidiaries,” he said.

“We have made good progress with GOI in respect of further exploration in the Barmer Basin. With our internal preparation to implement exploration programs at an advanced stage, I am confident that the Joint Venture can move quickly to harness the block’s full potential post approvals. Our farm-in agreement in the Orange Basin, South Africa and partnership with PetroSA, is a step in the right direction towards our strategic goal of growing our resource base by building a balanced portfolio with a long term vision,” he also said.

Meanwhile, the company also stated that its oil exploration programme on Sri Lanka’s side of the Mannar Basin was on schedule with further exploratory drilling expected next year.

“600 sq km 3D seismic acquisition program under Phase 2 exploration period was completed in Block SL 2007-01-001 in order to evaluate certain leads and to finalise future drilling locations. The 3D seismic acquisition programme has been carried out on time, within budget and without any HSE incidents. Data processing of the acquired survey is in progress. The Phase 2 exploration well is planned to be drilled in mid CY 2013,” the report said, elaborating on the company’s operations in Sri Lanka.