Cairn India sees cash flow of up to $3 billion from Rajasthan oil fields

25 June 2008

Mumbai: Cairn Energy Plc subsidiary Cairn India Ltd expects an operating cash flow of about $2 billion from its Rajasthan fields, at crude price of $60 a barrel. With an increment of $500 million for every $20 rise in the price of crude, Carin will have annual cash flow of around $3 billion, at crude prices of $100 a barrel, by the second half of 2010, chairman Sir Bill Gammell told the annual general meeting of the company.

Cairn India has already started price negotiations with a host of buyers, including Reliance Industries, Essar Oil, Indian Oil and Mangalore Refineries, for its waxy Rajasthan crude.

These companies are reported to have agreed to lift the entire crude oil from Cairn India's Rajasthan Mngala blocks.

Reports said RIL has agreed to lift 60,000 barrels of oil per day for processing at its new refinery being set up by Reliance Petroleum (RPL) at Jamnagar. Essar Oil has also agreed to buy up to 1,20,000 bpd of crude oil from Cairn to process at its 10.5 million tonne per annum refinery in Vadinar.

Cairn India said it plans to spend around $2 billion over the next 18 months under a revised development plan for Mangala field.

Cairn and partner Oil & Natural Gas Corp. Ltd plans to reach an estimated plateau rate of production from the Mangala, Bhagyam and Aishwarya fields in Rajasthan of 175,000 barrels per day against the 150,000 barrels per day projected earlier.