Cairn Energy hits Indian oil targets ahead of schedule
- 28 October 2010
- From the section Scotland business
Cairn Energy's Indian operations have hit production targets ahead of schedule, according to a statement from the Edinburgh-based oil explorer.
The Mangala oilfield operation hit the target of 125,000 barrels per day early in the third quarter of this year, three months earlier than expected.
The Rajasthan field has already earned more than US$1bn in revenue (£630m).
It hopes to increase flow to 175,000 barrels per day by the end of 2011, and could expand to 240,000 barrels.
Getting the giant oilfield up to speed, flowing through a newly-opened pipeline, has meant revenue rose in the third quarter of this year by 220%. That is a ten-fold increase from the same period last year.
Cairn Energy in Edinburgh plans to sell a majority stake in Cairn India to Indian metals group Vedanta Resources, though that is awaiting approval from the Indian government.
The Indian government is entitled to pre-empt the Vedanta deal by requiring a sale of Cairn Energy's stake to state-owned ONGC. It is expected that issue will be resolved by the end of this year.
Cairn Energy also updated the London Stock Exchange on Thursday, with chief executive Sir Bill Gammell saying progress in its drilling programme off the west coast of Greenland is "extremely encouraging".
This is despite two of three prospects in the first months of drilling being abandoned without commercially-viable finds. A third showed better signs of oil and gas, but the exploration ran out of time on 30 September, when Cairn was required to postpone its drill programme ahead of winter.
Sir Bill commented: "The Vedanta transaction continues to progress as we work with the government of India in a consensual manner to secure the necessary consents and approvals for completion.
"Exploration in Greenland is at an embryonic stage but the fact that we have encountered both gas and oil during this campaign, in a previously undrilled geological basin, is extremely encouraging.
"The goal of our future exploration efforts will be to establish significant reservoir potential, leading to potential commercial success."
In addition to drilling, Cairn is continuing with seismic surveys of 10,000 sq km of sea area off the Greenland coast.