Last checked at 4 Nov 2009 12:11
For Immediate Release
4 November 2009
Cairn Energy PLC
The attached release was issued today by Cairn India Limited ("Cairn India") to the Bombay Stock Exchange and the National Stock Exchange of India.
For Immediate Release
4 November 2009
Cairn India Reaches Initial Agreement for Crude Supplies to RIL
Cairn India, which has commenced crude production from the Mangala field in Barmer, Rajasthan, has concluded an initial agreement to supply crude oil from the Mangala field to Reliance Industries Limited (RIL) in Jamnagar, Gujarat.
This agreement is pursuant to the Government of India's (GoI) approval allowing private refiners to qualify as additional offtakers of the Rajasthan crude.
The crude oil will be delivered to RIL's Jamnagar refinery through heated crude oil tankers.
As in the case of GoI nominees, IOC and MRPL, the commercial terms including the price for the initial offtake of the Rajasthan crude have been concluded with RIL.
The implied price realisation represents an average 10-15% discount to Brent on the basis of prices prevailing for the six months to September 2009.
Cairn has requested the GoI to nominate additional offtake arrangements and discussions with other private refiners are in progress.
Cairn has designed the Mangala Processing Terminal (MPT) to process crude before being evacuated for sale to GoI nominees and private refiners. The MPT will process crude from the Mangala, Bhagyam and Aishwariya fields - collectively known as the MBA fields. The MPT is designed to process 205,000 bopd of crude with scope for further expansion.
Enquiries to:
Analysts/Investors
Anurag Mantri, Group Financial Controller +919810301321
Media
Manu Kapoor, Director - Corporate Affairs & Communications +919717890260
About Cairn India Limited
"Cairn India" where referred to in the release means Cairn India Limited and/or its subsidiaries, as appropriate.
Cairn Lanka (Private) Limited, is a wholly owned subsidiary of Cairn India that holds a 100% participating interest in the Mannar block.
"Cairn" where referred to in this release means Cairn Energy PLC and/or its subsidiaries (including Cairn India), as appropriate.
Cairn India is headquartered in Gurgaon in the National Capital Region, with operational offices in Chennai, Gujarat, Andhra Pradesh and Rajasthan.
On 9 January 2007, Cairn India Limited was listed on the Bombay Stock Exchange and the National Stock Exchange of India. Cairn Energy PLC currently holds a 62.39% shareholding in Cairn India Limited.
Cairn India holds material exploration and production positions in 10 blocks in India and one in Sri Lanka.
The focus on India has resulted in a significant number of oil and gas discoveries. In particular, Cairn made a major oil discovery (Mangala) in Rajasthan in the north west of India at the beginning of 2004. Twenty five discoveries have been made in Rajasthan block RJ-ON-90/1.
In Rajasthan, Cairn India operates Block RJ-ON-90/1 under a Production Sharing Contract (PSC) signed on 15 May 1995. The main Development Area (1,858 km2), which includes Mangala, Aishwariya, Saraswati and Raageshwari is shared between Cairn India and ONGC, with Cairn India holding 70% and ONGC having exercised their back in right for 30%. A further Development Area (430 km2), including the Bhagyam and Shakti fields, is also shared between Cairn India and ONGC in the same proportion.
The Operating Committee for Block RJ-ON-90/1 consists of Cairn India and ONGC.
India currently imports more than 2.4 million barrels of oil per day (bopd). The domestic production is approximately 0.7 million barrels of oil per day of which approximately 56,000 bopd comes from the Cairn India operated assets (Ravva, CB-OS/2 and the Rajasthan block)
For further information on Cairn India Limited see www.cairnindia.com
Glossary
Corporate
| Cairn India/CIL | Cairn India Limited and/or its subsidiaries as appropriate |
| Company | Cairn India Limited |
| CY | Calendar Year |
| DoC | Declaration of Commerciality |
| JV | Joint Venture |
| MBA | Mangala, Bhagyam and Aishwariya |
| MPT | Mangala Processing Terminal |
| MRPL | Mangalore Refinery and Petrochemicals Limited, (subsidiary of ONGC) |
| IOC | Indian Oil Corporation |
| HPCL | Hindustan Petroleum Corporation Limited |
| E&P | exploration and production |
| GoI | Government of India |
| Group | the Company and its subsidiaries |
| MC | Management Committee |
| ONGC | Oil and Natural Gas Corporation Limited |
| OC | Operating Committee |
Technical
| 2P | proven plus probable |
| 3P | proven plus probable and possible |
| 2D/3D | two dimensional/three dimensional |
| boe | barrel(s) of oil equivalent |
| boepd | barrels of oil equivalent per day |
| bopd | barrels of oil per day |
| Bscf | billion standard cubic feet of gas |
| EOR | enhanced oil recovery |
| FDP | field development plan |
| mmboe | million barrels of oil equivalent |
| mmscfd | million standard cubic feet of gas per day |
| mmt | Million metric tonne |
| PSC | Production Sharing Contract |
The Fatehgarh is the name given to the primary reservoir rock of the Northern Rajasthan fields of Mangala, Aishwariya and Bhagyam.
The Barmer Hill is a lower permeability reservoir which overlies the Fatehgarh.
The Dharvi Dungar forms the secondary reservoirs in the Guda field and is the reservoir rock encountered in the recent Kameshwari West discoveries.
The Thumbli forms the youngest reservoirs encountered in the basin. The Thumbli is the primary reservoir for the Raageshwari field.
These materials contain forward-looking statements regarding Cairn India, our corporate plans, future financial condition, future results of operations, future business plans and strategies. All such forward-looking statements are based on our management's assumptions and beliefs in the light of information available to them at this time. These forward-looking statements are, by their nature, subject to significant risks and uncertainties and actual results, performance and achievements may be materially different from those expressed in such statements. Factors that may cause actual results, performance or achievements to differ from expectations include, but are not limited to, regulatory changes, future levels of industry product supply, demand and pricing, weather and weather related impacts, wars and acts of terrorism, development and use of technology, acts of competitors and other changes to business conditions. Cairn India undertakes no obligation to revise any such forward-looking statements to reflect any changes in Cairn India's expectations with regard thereto or any change in circumstances or events after the date hereof. Unless otherwise stated the reserves and resource numbers within this presentation represent the views of Cairn India and do not represent the views of any other party, including the Government of India, the Directorate General of Hydrocarbons or any of Cairn India's joint venture partners.