London: UK oil explorer Cairn Energy said on Tuesday its Indian unit would propose to pay the majority of the cost to build a pipeline to transport crude from its Rajasthan fields.
Uncertainty over who would pay had put a question mark over whether the fields could be developed on time.
“It is proposed that the pipeline will fall within the definition of the field development activities and will accordingly be funded 70% by Cairn India and 30% by ONGC,” the company said in a statement.
It was earlier envisaged that India’s state-owned Oil and Natural Gas Corp. Ltd (ONGC) would lead the construction of the pipeline.
Cairn also reported a loss of $82.0 million (Rs354 crore) for 2006, compared to a profit of $79.1 million in 2005 and an average forecast for a loss of $29 million, according to a Reuters Estimates poll of analysts.
Cairn said it hoped to increase reserves and prolong peak production at the Rajasthan fields by using enhanced oil recovery techniques.
However, uncertainty over Cairn’s Bangladesh assets forced the Edinburgh-based company to downgrade its reserves there.
Cairn’s Indian business was floated on the Bombay Stock Exchange and the National Stock Exchange of India in January, but Cairn retains a 69.5% stake in the company, Cairn India.