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Cairn sells 30.6% of Greenland block to Statoil
BY ALEXIS FLYNN
LONDON -- Exploration firm Cairn Energy said Monday it has agreed to sell a 30.6% working interest in the Pitu oil and gas exploration block off the west coast of Greenland to Norway's oil and gas major Statoil ASA.
"Statoil's extensive Arctic operating and development experience makes them the partner of choice for the Pitu block where we see significant potential," said Cairn Chief Executive Simon Thomson.
The company, which transformed its fortunes with a major discovery in Rajasthan, India in 2004, has since turned its attention to exploring for oil offshore Greenland. Two drilling campaigns--in 2010 and 2011--have so far failed to yield commercial quantities of oil and gas, although the company says it has been encouraged by some hydrocarbon finds and would look to bring in partner firms to conduct further searches.
Under the terms of the agreement Statoil will acquire a working interest of 30.625% in the Pitu licence. Cairn will retain exploration operatorship, with a 56.875% interest in the block, while Statoil will operate any future development. Nunaoil has an ongoing 12.5% interest in the block.
Cairn didn't say how much it would be paid for the share of Pitu. However, according to a Cairn statement, Statoil will pay a signature bonus, back costs on the block and promoted terms of future exploration expenditure.
The deal is subject to the approval of the Greenland Government, said Cairn.
Dow Jones Newswires
KOMENTRAZ AUTORA KRZYSZTOF A. FUGIEL FORUM
Gdy w 2001 roku pilskie urządzenie IRI - 1200 było rozładowywane w porcie w Mumbaju, nikt nie spodziewał się, że kontrakt pomiędzy PNIG Kraków i Cairn Energy India doprowadzi do odkrycia największego lądowego złoża ropy naftowej na kontynencie indyjskim.
Szkocka firma Billa Gamela - Cairn Energy miała doświadczenia w dziedzinie poszukiwań ropy naftowej i gazu ziemnego na Morzu Północnym i w Bangladeszu. Poszukiwała też ropy i gazu w Indiach, ale w Zatoce Bengalskiej oraz w na morzu na wschód of wybrzeży Gudżaratu.
Prace poszukiwawcze w Radżastanie rozpoczęły się od wiercenia otworu Kossulu - 1 w distrykcie Barmer.
Po 9 latach rusza w Radżastanie produkcja "ciężkiej" ropy naftowej, która będzie transportowana podrzewanymi cysternami samochodowymi do rafinerii w Gudżaracie, a budowany już podgrzewany i izolowany ropociąg przejmie transport tej ropy w roku 2010.
W 2011 Cairn Energy sprzedaje firmie VEDANTA wszystkie swoje aktywa i pasywa znajdujÄ…ce siÄ™ w Indiach, potrzebuje funduszy na swoje wiercenia w okolicach Grenlandii.
GratulujÄ™ z calego serca sukcesu firmie CAIRN INDIA z Edynburga!
Vedanta confirms Cairn deal approval
Published on Wednesday 7 December 2011 00:00
Vedanta Resources yesterday confirmed that Indian regulators had now approved all conditions for Cairn Energy?s sale of a controlling stake in Cairn India.
Edinburgh-based Cairn Energy, which owns about 52 per cent of Cairn India, has been awaiting clearance to sell a 30 per cent stake in the business to mining giant Vedanta, which already owns a 29 per cent holding.
The deal is set to bring in cash for Cairn?s drilling campaign off the coast of Greenland and to return a ?substantial proportion? of the proceeds from the sale to shareholders.
Cairn right on track to clear the final hurdle
A Cairn Energy employee looks across at one of the group's oil wells in India
By Dominic Jeff
Published on Tuesday 6 December 2011 01:00
CAIRN Energy yesterday appeared to have cleared the final hurdle in the long-awaited sale of its Indian oil business, triggering big payouts for shareholders.
The Indian government was reported to have given the green light to the $9.6 billion (?6.2bn) deal that was initially struck 16 months ago with mining giant Vedanta Resources.
Analysts expect that the completion of the sale of the bulk of Cairn India will bring in $4bn in cash to the Scottish explorer, and that $2.4bn will be distributed to shareholders. Part of the deal had already been completed.
The final agreement had been held up due to a disagreement between Cairn and its Indian partner, Oil & Natural Gas Corporation (ONGC), over royalty payments, as well as an ongoing tax dispute. In September, Cairn India and ONGC agreed new terms. But while both Cairn Energy and Vedanta said the government?s final agreement was due by the end of this year, some feared it could drag on into 2012.
Yesterday, a spokesman for Cairn India was reported as saying ?we are there? after receiving security clearance from India?s home ministry. Cairn Energy later declined to comment on ?speculation?.
An end to the saga should provide Cairn with a timely cash injection after a disappointing run of results in its drilling campaign off the coast of Greenland. It recently vowed to keep looking after five wells failed to strike oil this year.
Cairn India announces gas discovery in Barracuda well
November 14, 2011 Source: Cairn
Cairn Lanka Limited, a wholly owned subsidiary of Cairn India Limited, has notified the appropriate authorities in the Government of Sri Lanka of a Gas Discovery in the CLPL-Barracuda-1G/1 well, located in the block SL 2007-01-001, Mannar Basin, Sri Lanka.
This is the second well in a three well frontier basin program. Cairn Lanka Private Limited is the operator and has a 100% participating interest in the block.
The well was drilled to a total depth of 4741metres(m) in water depth of 1509m and encountered 24m of hydrocarbon bearing sandstone in three zones between the depths of 4067m and 4206m. The reservoirs are predominantly gas bearing with some additional liquid hydrocarbon potential.
Cairn will evaluate the well results and work with appropriate authorities to determine the commercial potential of this discovery.
The CLPL-Barracuda-1G/1 well is the second successive discovery, located 38 kilometers (km) west of the CLPL-Dorado-91H/1z discovery well and approximately 68 km from the Sri Lanka coastline.
An update on the well results will be provided after the end of the program, which is expected to be complete by early next year.
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Aug 4, 2011
Cairn India Reports $830 Million First-Quarter Earnings
Mangala reservoir is producing 125,000 barrels per day, the company reports.
Mike Madere
Cairn India Ltd., a key player in the Indian oil and gas industry, reported earnings of US $830 million (INR $37,127 million) in first-quarter 2001, a 342% increase from the same period last year. Profit after tax was $610 million (INR $27,266 million), a year-on-year increase of 869%. The company?s first quarter ended on June 30.
?The Mangala reservoir continues to perform as per expectations, and production has been maintained at 125,000 barrels of oil per day,? said Rahul Dhir, the company?s managing director and chief executive.
?The Rajasthan fields have significant growth potential, and an increase in production from this world-class asset will enhance the energy security of our nation,? Dhir said, adding that the optimal development of the resource will hinge on the support of its joint-venture partner, the state-owned Oil and Natural Gas Corp. Ltd. (ONGC), and the Indian government.
The Saraswati field in the Barmer district of Rajasthan began production at the end of May and is currently producing of 250 barrels of oil per day, according to the company. The Bhagyam field is on track, and the final testing and commissioning of initial well pads is under way. Pending the government?s approval, production is expected to being in the fourth-quarter of calendar year 2011 and hit 40,000 barrels per day by year?s end.
In addition, the development of the Aishwariya field is under way and production is scheduled to begin in the second half of 2011. The project is subject to joint venture and government approval.
In other production news, the company also reported:
- Train Four construction at Mangala Processing Terminal (MPT) is on track. Commissioning is expected in the fourth quarter of calendar year 2011, and capacity is expected to be 205,000 barrels per day.
- In CB/OS-2, the North Tapti pipeline tie-in activities by ONGC are at an advanced stage of completion. Tolling and processing of gas will commence following the completion of the project.
- In Sri Lanka, exploration drilling will begin in August 2011.
- Chikyu, a fifth-generation drill ship, has been mobilized from Japan.
Corporate Developments
The holding company of Cairn India Limited, Cairn UK Holdings Limited, along with its holding company, Cairn Energy PLC, has agreed to sell a substantial part of its shareholding in the company to Vedanta Resources PLC and Twin Star Holdings Ltd.
Following amendments to the sale and purchase agreement, Cairn Energy PLC has sold 191,920,207 (10.0%) shares to the Acquirer as of July 11. Vedanta now holds 28.5% of shares on a fully diluted basis. Acquisition of an additional 30% by the Vedanta Group is subject to government approval. Cairn Energy PLC currently remains the majority shareholder of Cairn India with a 52.1% of shares.
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Cairn discovers oil and gas onshore India's Krishna Godavari Basin
The Cairn India offshoot of Cairn Energy has made an oil and gas discovery onshore India's Krishna Godavari Basin with its exploration well Nagayalanka-1z drilled in Block KG-ONN-2003/1.
Cairn reported the find to India's petroleum industry regulator, the Directorate General of Hydrocarbons (DGH). It said that the discovery well flowed 75 b/d of oil and 270,000 cf/d of natural gas, and that it is currently evaluating the find to determine its commercial potential.
Cairn India is the operator of Block KG-ONN-2003/1 with 49% participating interest, with Oil and Natural Gas Corporation (ONGC) holding the remaining 51%.
Vedanta Resources, a London company, is seeking to acquire controlling interest in Cairn India for as much as US$9.6 billion. If the stake is to be sold, it requires approval both from the Indian government and ONGC, its partner, and Vedanta's offer could be countered by offers from ONGC as well as Oil India Limited and the Gas Authority of India Limited (GAIL).
Mining firm agrees to up to $9.6 billion for Cairn India
By OGJ editors
HOUSTON, Aug. 16 2010 -- 
Vendata Resources PLC, London, has entered a conditional agreement with Cairn Energy under which it will pay as much as $9.6 billion in cash for up to 60% of Cairn?s Indian subsidiary.
The deal, which is subject to regulatory and shareholder approvals, includes an offer for publicly held shares of the subsidiary, Cairn India. Cairn Energy now owns 62.4% in Cairn India.
Depending on outcome of the public offer, Vendata would hold 31-40% of Cairn India directly, and Sesa Goa Ltd., a Panaji, India, iron ore company in which Vendata holds a 57.1% interest, would hold 20%.
Cairn India holds interests in 11 blocks in India and Sri Lanka.
Its main project is development of three oil fields in Rajasthan, the first of which, Mangala, went on stream in August 2009 and now produces about 125,000 b/d of oil. Pipeline sales began last June via a 590-km, continuously heated and insulated pipeline between a terminal near the fields at Barmer and Salaya, near the refining center at Jamnagar.
The Indian government has approved production of 175,000 b/d from Mangala and nearby Bhagyam and Aishwarhya fields. Cairn India holds a 70% interest in the Rajasthan area, where it has reported 25 discoveries. State-owned Oil & Natural Gas Corp. holds the remainder.
Cairn India also operates producing Block PKGM-1 in the Krishna-Godavari basin off eastern India and Block CB/OS-2 in the Cambay basin off western India. It holds equity interests in eight nonproducing blocks under varying stages of exploration.
Cairn Energy said it would use proceeds of the deal to ?advance its exploration program in its frontier basin positions in Greenland? and seek growth opportunities. In addition to its Greenland positions, the company has production and exploratory interests in Bangladesh, frontier exploratory interests in Nepal, and exploration licenses in the Mediterranean region.
If the transaction proceeds, Cairn Energy will receive $6.65-8.48 billion and hold 10.6-21.6% of Cairn India at completion.
At year end 2009, Cairn India had gross assets of $3.07 billion. For the quarter that ended June 30, it reported after-tax profit of $62 million, compared with $9 million the comparable quarter of 2009.
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Rajasthan block: Ministry puts foot down; disallows extension to Cairn
Sept 9 2009: As the initial train of 30,000 barrels of oil per day starts to trundle out of the Rajasthan block RJ-ON-90/1, 
Cairn Energy India Ltd (CEIL) looks headed for a collision course with the government. "The operator has been denied permission to carry out any further extension of 238 sq km of Kameshwari west discovery area," reliable petroleum ministry sources, familiar with operational aspects of the project, told Indian Petro Group on Wednesday (September 9, 2009). The management committee (MC) of the block has requested for an extension in the Kameshwari (W), after the petroleum ministry recently approved a new development area -- 822 sq km -- in the contract area. The three discoveries made in the area include Kameshwari West 2, Kameshwari West 3 and Kameshwari West 6. Even last year a miffed petroleum ministry had written to Cairn, disallowing the Kameshwari West 2 and Kameshwari West 3 oil and gas finds.
The government held the Scottish oil and gas major accountable for not adhering completely to provisions of the Production Sharing Contract (PSC) in the Rajasthan acreage. Rejection of the oil and gas finds meant that the company could not be allowed to include the cost of well development in the field production costs. The government refused to recognize the discoveries on the grounds that both the wells were drilled after the expiry of a minimum work programme period. Before filing the DoC, Cairn clarified to the ministry that severe flooding in Rajasthan -- during 2006 -- interrupted the work programme leading to ceasing operations in the area and subsequent delay in drilling. The Dharvi Dungar forms the secondary reservoirs in the Guda field and is the reservoir rock encountered in the recent Kameshwari West discoveries.
8Readers would note that the Mangala -- the first field to go on production -- will be ramped up to 80,000 barrels by end 2009. Production from the block would plateau at 175,000 barrels a day around 2011. Cairn plans to initially transport the Rajasthan crude to the Gujarat coast by trucks till the end of this year. The company is likely to commission the world's longest heat-insulated pipeline by end-2009.
Cairn India starts oil production at Rajasthan
Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Sept. 2 -- Cairn India Ltd. started oil production at its Mangala field in Rajasthan state in part of the larger complex of Mangala, Bhagyam, and Aishwariya (MBA) fields.
Representing the largest of 25 discoveries made by the firm in the Barmer basin on Block RJ-ON-90/1, Mangala?s initial output of 30,000 b/d will increase to 130,000 b/d by first-half 2010, with production rising to a peak of 175,000 b/d over the next 2 years.
According to Cairn, the MBA fields hold nearly 1 billion bbl of oil recoverable, including proven plus probable gross reserves and resources of 685 million boe with a further 300 million boe, or more, with enhanced oil recovery potential.
The firm said initial volumes of oil will be produced through the first processing train with a capacity of 30,000 b/d. Production will continue to increase until all four processing trains, with a total capacity of 205,000 b/d, are built and installed by 2011.
Cairn said it is building a 670-km heated and insulated oil pipeline from the Mangala processing terminal to the Gujarat coast. The first phase is targeted for completion by yearend.
The 24-in. export line will extend from Barmer in Rajasthan to a coastal location in Gujarat, via Viramgam. It will have an 8-in. gas line running most of its length, starting from the Raageshwari gas field on Rajasthan block.
Cairn said a minimum of 32 intermediate power feeding and heating stations will be built along the length of the oil pipeline, aimed at helping to maintain the required temperature within the pipeline.
Until the pipeline is complete, oil will be transported by heated trucks from the MPT to the Gujarat coast.
Cairn India operates and has a 70% stake in RJ-ON-90/1 block in Rajasthan, while India's Oil & Natural Gas Corp. holds 30%.
Contact Eric Watkins at hippalus@yahoo.com
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Cairn starts oil production in Rajasthan ? Prime Minister dedicates it to the Nation
Cairn India has started production from the world class Mangala Field in Rajasthan. Mangala is the largest of 25 discoveries made by Cairn in the Barmer Basin in Block RJ-ON-90/1
The Mangala field was dedicated to the Nation by the Hon?ble Prime Minister of India, Dr. Manmohan Singh, at the Mangala Processing Terminal, Barmer, Rajasthan today in an inauguration ceremony attended by Central and State Government officials.
First oil was evacuated via trucking to the Gujarat coast for onward transport to MRPL, one of the Government nominated buyers, using a heated crude oil tanker. The oil production will gradually ramp up to a peak production of 175,000 barrels of oil per day over the next two years. At this point, oil production from Rajasthan oil fields will account for over 20% of India?s domestic oil production.
Among those present at the event were dignitaries including the Chief Minister of Rajasthan, Shri Ashok Gehlot, the Union Minister for Petroleum and Natural Gas (P&NG), Shri Murli Deora, Minister of State for Petroleum and Natural Gas, Shri Jitin Prasada, the Member of Parliament for Barmer, Shri Harish Chaudhary, the Minister of State for Mines, Environment and Forest, Government of Rajasthan, Shri Ram Lal Jat, Secretary (P&NG), Shri R.S. Pandey, Directorate General of Hydrocarbons , Shri V. K. Sibal and Chairman and Managing Director of ONGC, Shri R.S. Sharma. Cairn was represented by Sir Bill Gammell, Chairman, Cairn India and Shri Rahul Dhir, Managing Director and CEO, Cairn India
Cairn India, the Operator of the Rajasthan block, holds a 70 percent participating interest with ONGC, its joint venture (JV) partner, holding the balance of 30 percent. The JV has already invested approximately USD 2 billion in the Rajasthan project and has plans to invest a further USD 1.8 billion by 2011, making it one of the largest onshore oil and gas projects in India.
Highlights of the Rajasthan project include:
* The Mangala field was discovered in January 2004 - the largest onshore oil discovery in India in more than 20 years
* The Mangala, Bhagyam and Aishwariya (MBA) fields have recoverable oil of nearly 1 billion barrels which includes proven plus probable (2P) gross reserves and resources of 685 million barrels of oil equivalent (mmboe) with a further 300 mmboe, or more, of Enhanced Oil Recovery (EOR) potential
* Initial volumes of crude will be produced through the first processing train which has a capacity of 30,000 barrels and production ramp up will continue until all four processing trains, with a total capacity of 205,000 bopd, are built and installed by 2011
* The MBA fields, once on peak plateau production of 175,000 bopd, will contribute more than 20% of India?s domestic crude production
* The Rajasthan resource base has continually grown since the discovery of Mangala in 2004 ? a total of 25 discoveries have already been made - the focus being to realise the full potential of the Barmer Basin in the coming years
* The total acreage under long term contract is 3,111 km2 spread across the districts of Barmer and Jalore
* The Mangala Processing Terminal (MPT) will act as the hub for processing crude oil from all the Rajasthan fields
* ~16,000 workers are currently involved in the construction activities -5,000 on the pipeline and 11,000 on the MPT
* The world?s longest heated and insulated crude oil pipeline is being built by Cairn from the MPT to the Gujarat coast ? length of 670 kilometres - giving access to more than 75% of India?s refining capacity ? the first phase is targeted for completion by the end of 2009
* Special heated trucks deployed for evacuation of crude from Mangala Processing Terminal to Gujarat Coast
* Crude production from the Rajasthan fields will generate revenues of approx Rs. 36,000 crore (US$7.6 billion) in the form of royalties to the State Government of Rajasthan over the life of the project, while the Government of India will earn approximately. Rs. 46,000 crore (US$9.5 billion) as profit petroleum, assuming crude oil prices of US$50 a barrel
* Employed highly mobile custom built rapid drilling rigs, with compact lay out, which has resulted in savings in land, infrastructure and drilling costs
* Use of latest drilling and completion technology to create high rate production wells with capacity of up to 10,000 barrels of oil per day
The GoI has nominated MRPL, IOC and HPCL for the initial offtake quantities from the Rajasthan block for the period 2009-10 and 2010-11 and the commercial terms and pricing negotiations have been concluded with IOC and MRPL.
The pricing agreed with MRPL and IOC for the initial volumes of crude from Mangala represent a 10-15% discount to Brent on the basis of prices prevailing for the six months to June 2009. This is subject to GoI approval.
Rahul Dhir, Managing Director and Chief Executive, Cairn India said:
?This is a significant and historic event for both Rajasthan and India as the country's biggest onshore oil discovery for more than two decades is brought on production
Cairn is delighted to have support from the highest levels of the Government of India and it is an honour to have the Mangala field, which will enhance India?s energy supplies, inaugurated by the Hon?ble Prime Minister of India, Dr. Manmohan Singh.
We have worked closely with our partners, including state and local authorities, to ensure that the project is delivered on to time, so as to maximise the benefits to the company and the local Barmer community.
Cairn would like to thank the people of Barmer and Rajasthan and we hope the project will bring further benefits to the economy in the area.?
Sir Bill Gammell, Chairman of Cairn India said:
?This is major milestone and historic moment for the Cairn group.
We are delighted that we have been able to bring this field from discovery to production successfully within five years.
It is a world class development and we would like to thank our partners, ONGC the state and central government along with our contractors who have made this achievement possible. It is a credit to everyone who has worked on the project.
We look upon this as the first step in developing the MBA fields further and continuing to grow our business.?
Enquiries to:
Analysts/Investors
Anurag Mantri, Group Financial Controller +919810301321
Media
Manu Kapoor, Director, Corporate Affairs +919717890260
About Cairn India Limited
* Cairn India where referred to in the release means Cairn India Limited and/or its subsidiaries, as appropriate.
* Cairn Lanka (Private) Limited, is a wholly owned subsidiary of Cairn India that holds a 100% participating interest in the Mannar block.
* Cairn where referred to in this release means Cairn Energy PLC and/or its subsidiaries (including Cairn India), as appropriate.
* Cairn India is headquartered in Gurgaon on the outskirts of Delhi, with operational offices in Chennai, Gujarat, Andhra Pradesh and Rajasthan.
* On 9 January 2007, Cairn successfully concluded the flotation of its Indian business with the commencement of trading of Cairn India Limited on the Bombay Stock Exchange and the National Stock Exchange of India. Cairn Energy PLC currently holds a 65% shareholding in Cairn India Limited.
* Cairn India holds material exploration and production positions in 13 blocks in west India and east India along with new exploration rights elsewhere in India and Sri Lanka.
* This focus on India has already resulted in a significant number of oil and gas discoveries. In particular, Cairn made a major oil discovery (Mangala) in Rajasthan in the north west of India at the beginning of 2004. Twenty five discoveries have been made in Rajasthan block RJ-ON-90/1.
* In Rajasthan, Cairn India operates Block RJ-ON-90/1 under a Production Sharing Contract (PSC) signed on 15 May 1995. The main Development Area (1,858 km2), which includes Mangala, Aishwariya, Saraswati and Raageshwari is shared between Cairn India and ONGC, with Cairn India holding 70% and ONGC having exercised their back in right for 30%. A further Development Area (430 km2), including the Bhagyam and Shakti fields, is also shared between Cairn India and ONGC in the same proportion.
* The Operating Committee for Block RJ-ON-90/1 consists of Cairn India and ONGC.
* India currently imports more than 2,000,000 barrels of oil per day (bopd). It produces approximately 700,000 bopd itself of which approximately 50,000 bopd comes from the Cairn India operated Ravva field on the east coast of India
* For further information on Cairn India Limited see www.cairnindia.com
Glossary
Corporate
Cairn India/CIL - Cairn India Limited and/or its subsidiaries as appropriate
Company - Cairn India Limited
DoC - Declaration of Commerciality
JV - Joint Venture
MBA - Mangala, Bhagyam and Aishwariya
MPT - Mangala Processing Terminal
MRPL - Mangalore Refinery and Petrochemicals Limited, (subsidiary of ONGC)
IOC - Indian Oil Corporation
HPCL - Hindustan Petroleum Corporation Limited
E&P - exploration and production
GoI - Government of India
Group - the Company and its subsidiaries
ONGC - Oil and Natural Gas Corporation Limited
Technical
2P - proven plus probable
3P - proven plus probable and possible
2D/3D - two dimensional/three dimensional
boe - barrel(s) of oil equivalent
boepd - barrels of oil equivalent per day
bopd - barrels of oil per day
bscf - billion standard cubic feet of gas
EOR - enhanced oil recovery
FDP - Field development plan
mmboe - million barrels of oil equivalent
mmscfd - million standard cubic feet of gas per day
PSC - production sharing contract
The Fatehgarh is the name given to the primary reservoir rock of the Northern Rajasthan fields of Mangala, Aishwariya and Bhagyam.
The Barmer Hill is a lower permeability reservoir which overlies the Fatehgarh.
The Dharvi Dungar forms the secondary reservoirs in the Guda field and is the reservoir rock encountered in the recent Kameshwari West discoveries.
The Thumbli forms the youngest reservoirs encountered in the basin. The Thumbli is the primary reservoir for the Raageshwari field.
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