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Cairn India Q1 profit soars on higher output

Cairn India Q1 profit soars on higher output
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First Published: Wed, Jul 27 2011. 09 59 AM IST
Updated: Wed, Jul 27 2011. 09 59 AM IST
New Delhi: Oil explorer Cairn India reported a nearly 10-fold jump in quarterly profit on higher output and said it would seek shareholder approval on the conditions set by the Indian government for its deal with Vedanta Resources .
Last month, India gave conditional approval to Vedanta Resources to buy a 40% stake in Cairn India from its British parent Cairn Energy , in a deal valued at around $6 billion.
Cairn India said net profit jumped to Rs 2,727 crore ($617 million) for its fiscal first quarter ended June, from Rs 280 crore in the year-ago quarter.
Revenue surged more than four times to Rs 3,713 crore.
Oil ministry has been pushing Cairn India to share royalty payments with state-run Oil and Natural Gas Corp, which has a 30% holding in the Cairn-operated fields in western India but pays 100% of the royalties.
Treating royalty as a cost for developing the field was one of the conditions set by the government to clear the deal with Vedanta.
Cairn India said in a statement late on Tuesday if royalty were to be cost recoverable it would lead to a decline in revenue and profit for the June quarter by Rs 1,292 crore.
Cairn India said it would hold a postal ballot of all the shareholders to consider the conditions imposed by the Indian government.
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First Published: Wed, Jul 27 2011. 09 59 AM IST
More Topics: Company Results | Cairn India | Oil | ONGC | Vedanta |