Cairn Energy considering IPO for Indian operations

14 March 2006

In an interview published on the company website, Gammell said, 'We have had a substantial increase in our reserve base in Rajasthan. I think it's natural to provide more autonomy for the Indian business, to have the management team in India drive that business forward.'

'We have a really exciting, growing resource base in Rajasthan. We have an emerging market in India that is very much energy hungry and we see it as a natural progression to partially float the Indian part of our business in India', he added.

The IPO move follows an attempt to sell the oil assets to Indian oil companies. Last month the company management had indicated that they are willing to sell the assets for an appropriate price.

Discussions were reportedly held between Cairn Energy and ONGC regarding the sale of assets. However, the two parties could not agree on the price as Cairn was reportedly expecting around $3.5 billion while ONGC was not willing to offer more than $2.2 billion.

Gammell denied that the IPO would be a prelude to selling the whole of its Indian operations. He said discussions were held with ONGC, without revealing the nature of those discussions. ONGC management had indicated last week that the company is considering Cairn's assets for a possible acquisition.