Cairn Energy

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Cairn Energy plc
Type Public limited company
Traded as LSE: CNE
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 (2012)[1]
Operating income $(247.3) million (2012)[1]
Net income $72.6 million (2012)[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, India, Nepal and Tunisia and produces around 33,000 barrels of oil equivalent per day.[2][3] Its largest activities are in India, where it has made more than 20 discoveries in Rajasthan, including a major oil discovery in Mangala.[4] 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.

Contents

History [edit]

The company was founded in 1981 by Sir Bill Gammell, the former international Rugby player, who remains its CEO, 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 Indian 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 additional 3.5 per cent of its shares in its Cairn India for about USD 360 million in June 2012.[16]

Operations [edit]

Cairn Energy operates in India, Bangladesh, Nepal,[17] Greenland and Tunisia in both exploration and production. Its average daily production in 2006 was 25,000 BOE/d.

Cairn India [edit]

In 2006 Cairn spun off its production interests in Western and Eastern India into a separate company called Cairn India Limited. Cairn Energy maintains a 69.9% initial interest in Cairn India.[18] Acreage held by its subsidiary Cairn India includes 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 29 August 2009 with a projected plateau production rate of 175,000 barrels per day (27,800 m3/d).

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 August 2009, Cairns started oil production in Rajasthan, India. This oil production is expected to meet about 6% of India's oil demands over the next few years and will represent about 20% of current oil production capacity.[19]

In September 2010, Vedanta Resources said that it was interested in buying a controlling stake of Cairn India. Union petroleum secretary S Sundareshan said that if Vedanta meets all the requirements for the deal there won'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."[20] Vedanta Resources acquired a 58.5% stake in Cairn India on 8 December 2011, for $8.67 billion.[21] Navin Agarwal is the new chairman of Cairn India.[22]

Cairn has continued to sell of shares of Cairn India.[23]

Greenland [edit]

In Greenland Cairn operates through its subsidiary Capricorn Greenland Exploration Limited.[24][25] 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.[26] 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.[24]

Sri Lanka [edit]

In November 2011 the company announced that it had made a second gas discovery in Sri Lanka.[27]

References [edit]

  1. ^ a b c "Preliminary Results 2012". Cairn Energy plc. Retrieved 22 March 2013. 
  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. ^ "Cairn Energy Operations". Cairn Energy. Cairn Energy. 15 August 2007. Retrieved 15 August 2007. 
  18. ^ "Proposed flotation of Cairn India Limited, approval of new share incentive arrangements and notice of extraordinary general meeting". Cairn Energy. Cairn Energy. 15 August 2007. Retrieved 15 August 2007. 
  19. ^ "Cairn to Start Oil Production in India This Week". The Wall Street Journal (WSJ). 26 August 2009. Retrieved 26 August 2009. [dead link]
  20. ^ Posted by Fahimz. "Cairn deal fine if Vedanta meets requirements: Oil secy". Topupguru.com. Retrieved 18 April 2011. 
  21. ^ (HT) – 8th Dec 2011 (8 December 2011). "Vedanta’s Cairn India stake buy completed". Live Mint. Retrieved 21 December 2011. 
  22. ^ Anil Agarwal's brother now Cairn India chairman, daughter joins board Business Standard, 17 December 2011, Retrieved 8 April 2012
  23. ^ "Cairn Energy selling Cairn India shares for up to $940 mn - Economic Times". Indiatimes (September 24, 2012). Retrieved 29 September 2012. 
  24. ^ a b "Cairn Energy Acquires Greenland Blocks". OilVoice. 10 January 2008. Retrieved 5 September 2010. 
  25. ^ "Licence: No. 2008/10, Sigguk, West Greenland". NUNAOIL. Retrieved 5 September 2010. 
  26. ^ "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. 
  27. ^ "Cairn makes second gas discovery in Sri Lanka". Business Standard. 14 November 2011. Retrieved 8 April 2012. 

External links [edit]

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