Page last updated at 12:06 GMT, Tuesday, 23 March 2010

Cairn Indian oil fields bigger than thought

Pipeline in Rajasthan
Cairn's 590km Rajasthan pipeline is close to being operational

Cairn Energy has raised its estimate of reserves in its Indian oilfields from 175,000 barrels of oil per day to a potential 240,000 barrels of oil.

The oil exploration company made an operating profit of $53m (£35m) in 2009, up from $11m in 2008.

Cairn shares rose 12% as the market reacted positively to the news.

The "uplift in expected reserves and production in India" bolstered the shares, said Nick McGregor from Redmayne Bentley stockbrokers.

Indian project

It will take stamina, skill and indeed luck to find them
Cairn Energy chief executive Sir Bill Gammell

Cairn expects its Indian production to "ramp up" in 2010 with the opening of new pipeline to get oil to the coast.

"The Rajasthan project has been a massive undertaking," said Cairn's chairman, Norman Murray.

"At the peak of construction last year, approximately 16,000 people were involved in building... making this project one of the biggest oil and gas production developments in India for many years."

Currently oil is transported by road tanker, but the new 590km pipeline will connect the Mangala processing terminal to the Gujarati city of Salaya by the middle of 2010.

'Stamina, skill and luck'

The company is also optimistic about its prospects in Greenland.

It will drill four wells this summer in Baffin Bay and estimates these areas could contain 4.1 billion barrels of oil.

"It is Cairn's belief that Greenland, as part of the North Atlantic geological province, has hydrocarbons present in its offshore basins; however, it will take stamina, skill and indeed luck to find them," said chief executive Sir Bill Gammell.

Cairn's "willingness to quantify how significant they think Greenland might be" raised its share price, Mr Redmayne said.



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SEE ALSO
Cairn turns tap on Indian oil well
29 Aug 09 |  Edinburgh, East and Fife
Cairn celebrates major milestone
25 Aug 09 |  Scotland

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