Cairn Energy

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Cairn Energy plc
Type Public limited company
Traded as LSECNE
Industry Oil and gas
Founded 1981
Headquarters Edinburgh, Scotland
Key people Sir Bill Gammell
(Non-Executive Chairman)
Simon Thomson
(CEO)
Products Petroleum, natural gas and other petrochemicals
Revenue $ 0 million (2013)[1]
Operating income $(879.1) million (2013)[1]
Net income $(555.9) million (2013)[1]
Website www.cairnenergy.com

Cairn Energy plc is an independent Scottish oil and gas exploration and production company headquartered in Edinburgh. It has operational interests in Albania, Bangladesh, Greenland, Nepal and Tunisia and produces around 33,000 barrels of oil equivalent per day.[2][3] It previously had major activities in India, where it made more than 20 discoveries in Rajasthan, including a major oil discovery at Mangala;[4] these were sold through the spin-off of its Indian subsidiary Cairn India to Vedanta Resources in December 2010. As at 30 June 2010, it had total proven commercial reserves of 247.4 million barrels (39,330,000 m3) of oil equivalent.[3]

Cairn Energy has a primary listing on the London Stock Exchange and is a constituent of the FTSE 250 Index. It has a secondary listing on the Bombay Stock Exchange.

History[edit]

The company was founded in 1981 by Sir Bill Gammell, the former international Rugby player, his father James (Jimmy), his brother Pete and others. Its initial operations were in the USA and, following its listing on the London Stock Exchange in 1988, it expanded into the UK North Sea and internationally (Papua New Guinea, Spain, Vietnam, China and Australia). Cairn acquired Conoco's UK onshore acreage in 1988 and became one of the largest operators of UK onshore oil production with the Palmers Wood oil field just south of London, near Junction 6 of the M25,[5] Humbly Grove (near Basingstoke) and others.

Cairn's expansion started with a substantial (non-operated) gas discovery (East Cameron 331) in the Gulf of Mexico in 1993 followed by another large gas discovery at Sangu, offshore Bangladesh near Chittagong, in 1996.[6] In parallel, Cairn launched a series of takeovers of public listed companies – Teredo Petroleum in 1994,[7] Holland Sea Search NV in 1995[8] and Command Petroleum in 1996.[9]

In 1996, Cairn farmed out a 25% interest in the Sangu field to Halliburton in return for Halliburton bearing a 50% share of the development costs.[10] In 1997, it sold half of all its Bangladeshi interests to Royal Dutch Shell in return for Shell assuming a $330 million carry of Cairn's exploration and development costs.[11] This agreement gave Cairn an interest in Shell's huge acreage position in Rajasthan onshore in North West India. Cairn drilled two unsuccessful exploration wells and Shell then sold its 50% share to Cairn for $7.5 million: Cairn's third well, now 100% owned, found the Mangala oil field.[12]

In December 2010, Cairn agreed to sell a stake of 58.5% of Cairn India, its India-focused subsidiary, to Vedanta Resources for $8.67 billion.[13] Talks between the two companies started in August 2010.[14] However, approval did not come from the Indian government until September 2011 and the deal had to be restructured.[15]

The company sold an additional 3.5 per cent of its shares in its Cairn India for about USD 360 million in June 2012.[16]

In March 2014, the company announced that Bill Gammell would step down as chairman after the annual general meeting on May 15, 2014.[17]

Operations[edit]

Cairn Energy operates in Bangladesh, Nepal,[18] Greenland and Tunisia in both exploration and production. Its average daily production in 2006 was 25,000 BOE/d. The company additionally has a 30% interest in Premier Oil's Catcher area oil and gas block in the North Sea.[19]

Greenland[edit]

In Greenland, Cairn operates through its subsidiary Capricorn Greenland Exploration Limited.[20][21] In August 2007, it was announced that Cairn had submitted applications for two blocks located in the phase 2 of the Disko West licensing round offshore West Greenland.[22] All together, it has six exploration licences, including Sigguk, Eqqua, Kingittoq and Saqqamuit blocks as an operator, and Atammik and Lady Franklin blocks as a minority partner in partnership with Encana Corporation.[20]

Sri Lanka[edit]

In November 2011 the company announced that it had made a second gas discovery in Sri Lanka.[23]

Spain[edit]

In January 2011 the company was awarded a license by the Spanish government for prospection and drilling in the area around the Balearic Islands and the Costa del Sol. There has been local and international opposition to the project with allegations of faulty environmental impact studies performed between 2012 and 2013. Ecologist organisation "OCEANA" warning that a marine ecosystem of more than 17 million hectares which include, 82 protected areas and nearly 200 protect species are at risk due to the ongoing seismic surveys and future drilling using fracking technology. Local communities which depend from tourism in Formentera, Ibiza, Majorca, Menorca as well as the Costa del Sol are mobilizing to stop the project.[24][25][26]

North Sea[edit]

In June 2014, the UK Department of Energy and Climate Change gave final approval for the development of the Catcher area oil and gas block in the North Sea, in which the company has a 30% interest. Oil is expected to be flowing by mid-2017.[19]

Cairn India[edit]

In 2006, Cairn spun off its production interests in Western and Eastern India into a separate company called Cairn India Limited. Acreage held by its subsidiary Cairn India included the Mangala Area in Rajasthan, which is thought to contain up to 1 billion barrels (160×10^6 m3) of recoverable reserves and came onstream in 2009.

Cairn still maintains production operations in the Sangu Gas Field offshore Bangladesh as well as exploration acreage in Northern India, Nepal and Southern Bangladesh.

In September 2010, Vedanta Resources said that it was interested in buying a controlling stake in Cairn India. India's Union petroleum secretary, S Sundareshan, said that if Vedanta were to meet all the requirements for the deal there wouldn't be any issue: “If the no-objection certificate is received from these 10 PSCs, the deal can get the green signal, he added. We have written to Cairn stating that they should seek these approvals."[27] Vedanta Resources acquired a 58.5% stake in Cairn India on 8 December 2011, for $8.67 billion.[28] Navin Agarwal is the new chairman of Cairn India.[29] The deal closed in the following months.

Cairn has continued to sell off shares of Cairn India after the Vedanta sale.[30]

References[edit]

  1. ^ a b c "Preliminary Results 2013". Cairn Energy plc. Retrieved 18 March 2014. 
  2. ^ "Operations and interests". Cairn Energy plc. Retrieved 5 September 2010. 
  3. ^ a b "2010 Half-yearly Report Announcement". Cairn Energy plc. Retrieved 5 September 2010. 
  4. ^ "Key facts". Cairn Energy plc. Retrieved 5 September 2010. 
  5. ^ Onshore Oil and Gas Discoveries 1983–2000 National Archives
  6. ^ Conclusion of successful Sangu drilling programme PR Newswire, 1996
  7. ^ Michael Seymour: Biography FT.com
  8. ^ Presentation to The Scottish Oil Club by Dr. Mike Watts of Cairn Energy titled "Building a Business in South Asia" Scottish Oil Club, November 2004
  9. ^ Oilex seeks a passage to India Daily Mail, 21 August 2006
  10. ^ Alliance to produce gas off Bangladesh Oil & Gas Journal, 5 August 1996
  11. ^ Shell joins Cairn Energy in natural gas projects in Bangladesh, India Journal Record, 1 May 1997
  12. ^ Cairn's oil find in Mangala to reduce India's import bill Financial Express, 14 November 2008
  13. ^ "Vedanta Shareholders approve deal with Cairn - Economic Times". Indiatimes (New Delhi). December 14, 2010. Retrieved 29 September 2012. 
  14. ^ "Vedanta agrees to buy Cairn India stake". Upstream Online (NHST Media Group). 16 August 2010. Retrieved 5 September 2010. 
  15. ^ Lamont, James (September 14, 2011). "Cairn progresses in sale of $6.5bn stake - FT.com". Financial Times (New Delhi). Retrieved 29 September 2012. 
  16. ^ "Cairn Energy sells 3.5% India arm stake". 29 June 2012. 
  17. ^ "Sir Bill Gammell stepping down from Cairn Energy". Oil Patch Asia. Retrieved 5 March 2014. 
  18. ^ "Cairn Energy Operations". Cairn Energy. Cairn Energy. 15 August 2007. Retrieved 15 August 2007. 
  19. ^ a b "Green signal to Premier's Catcher area oil block development". BBC News. Retrieved 22 September 2014. 
  20. ^ a b "Cairn Energy Acquires Greenland Blocks". OilVoice. 10 January 2008. Retrieved 5 September 2010. 
  21. ^ "Licence: No. 2008/10, Sigguk, West Greenland". NUNAOIL. Retrieved 5 September 2010. 
  22. ^ "Cairn Bids Places Bid in Phase 2 of Disko West Round". Bureau of Minerals and Petroleum (Greenland). Rigzone. 15 August 2007. Retrieved 15 August 2007. 
  23. ^ "Cairn makes second gas discovery in Sri Lanka". Business Standard. 14 November 2011. Retrieved 8 April 2012. 
  24. ^ "Soria se muestra "inflexible" y ratifica que las prospecciones no tienen marcha atrás". diariodeibiza. 23 June 2013. Retrieved 7 Feb 2013. 
  25. ^ "Mar Blava". Mar Blava. 20 February 2014. Retrieved 20 Feb 2013. 
  26. ^ "Ibiza y Formentera temen los efectos de la búsqueda de petróleo". Retrieved 16 March 2014. 
  27. ^ Posted by Fahimz. "Cairn deal fine if Vedanta meets requirements: Oil secy". Topupguru.com. Retrieved 18 April 2011. 
  28. ^ (HT) – 8th Dec 2011 (8 December 2011). "Vedanta’s Cairn India stake buy completed". Live Mint. Retrieved 21 December 2011. 
  29. ^ Anil Agarwal's brother now Cairn India chairman, daughter joins board Business Standard, 17 December 2011, Retrieved 8 April 2012
  30. ^ "Cairn Energy selling Cairn India shares for up to $940 million - Economic Times". Indiatimes (September 24, 2012). Retrieved 29 September 2012. 

External links[edit]