Cairn India makes new discovery, gets extension to drill oil

Cairn India makes new discovery, gets extension to drill oil
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First Published: Thu, May 10 2007. 11 20 AM IST
Updated: Thu, May 10 2007. 11 20 AM IST
By Manash Goswami/Bloomberg
Cairn India Ltd., a unit of Cairn Energy Plc., said it made two discoveries in its largest oil field and secured government permission to extend exploration work in that area, raising the chances of boosting output.
The drilling extension for its fields in Rajasthan is for six months, the New Delhi-based company said in a statement to the Bombay Stock Exchange. The stock rose as much as 2.4%.
Getting more time will help the company “explore the full potential” in the region, the statement said. The company has discovered 1 billion barrels of oil in the same fields which may boost India’s output by about 20% once production starts in 2009.
“The two discoveries confirm our belief that the Rajasthan basin is world class and will continue to add incremental value,” Chief Executive Rahul Dhir said in the statement.
Cairn in December sold $1.93 billion worth of shares to finance a portion of the cost of developing the Rajasthan fields. Investors included Malaysia’s state-owned Petroliam Nasional Bhd., which bought 10% of the company’s stock.
Oil output from Cairn’s Rajasthan area may reach 150,000 barrels a day by 2009, a peak level that may be sustained for as long as 10 years, Michael Watts, Cairn Energy’s director for exploration, said on 8 November. That compares to India’s current production of about 680,000 barrels a day.
The company made oil and gas discovery in the Kameshwari well-2 and gas discovery in Kameshwari well-3, the statement said.
The company’s shares rose as much as Rs3.05 to 131.5 and traded at Rs130.45 apiece at 10:20 a.m.
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First Published: Thu, May 10 2007. 11 20 AM IST
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