Cairn plans IPO for Indian unit

By agencies   |   Friday, 17 March 2006, 08:00 Hrs
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NEW DELHI: Scottish oil giant Cairn Energy Plc. plans to create a separate unit out of its Indian operations and sell at least 25 percent shares of the new firm through an initial public offering (IPO).

"We plan to split the company into two - one based in India focused on exploration and production and the other based in the U.K. focused on Cairn's exploration," a company spokesperson said.

The Indian firm will hold the profolic Rajasthan block, where Cairn estimates it has found in-place oil reserves in excess of 3.5 billion barrels, the 22.5 percent stake in the 50,000 barrels per day Ravva offshore oilfield and the Cambay Basin block CB/OS-2, home to 130 million standard cubic feet per day producing Lakshmi and Gauri gas fields and a potential oilfield.

An IPO of atleast 25 percent shareholding would be launched in 2008, before the oil production starts from Mangala, Bhagyam and Aishwariya fields - the largest finds in the Rajasthan block, he said.

"We estimate more than 3.5 billion barrels of oil at Rajasthan block and that the figure may increase furtner," Cairn Energy India Pty Ltd managing director Lawrence Smyth said.

The company estimates peak production at its Mangala, Bhagyam and Aishwariya fields in northern part of the Rajasthan block could be as much as 150,000 barrels of oil per day, compared with an estimate of 60,000 to 100,000 barrels about 18 months ago.

Southern fields, Saraswati and Raageshwari, would start producing oil at the rate of 2000-3000 barrels per day from second qaurter 2006, the spokesperson said.

“We are still waiting for the Field Development Plan for Mangala and Aishwariya. Once we have got that Field Development Plan, then we will sanction the project and move forward and we are looking to bring first production now in 2008," the spokesperson said.

"We now believe the time is right to examine methods of increasing the local autonomy of our Indian business, in line with our strategy of adding value for shareholders and are in recognition of the superb growth opportunities available in India," he added.

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