Cairn India plans to spend over $600 million over the next two years to further enhance output from its Rajasthan oilfields.
The company’s expected capital expenditure over the next two years – fiscal 2013 and 2014 is -- $2 billion. Of this, it plans to spend 70 per cent on exploration led growth with focus on Rajasthan exploration.
Rahul Dhir, Managing Director & Chief Executive Officer, at the company’s investor call said these investments are subject to Government approvals.
The company’s output from the Rajasthan block recently crossed cumulative oil production over 100 million barrels. The current production is sustained at 175,000 barrels of oil a day.
The Cairn-ONGC joint venture team in Rajasthan has identified numerous prospects that could translate into incremental revenues of $ 30 billion to the Government by way of royalty, cess, profit petroleum and taxes over life of field (40 years since start of production from August 2009) and a value creation of $10 billion.
Further, Cairn is now in the final leg of regulatory approvals for the internal re-organisation which is imminent, he said.
Corporate re-organisation is a prerequisite for any dividend payments from Cairn India.
The reorganisation was undertaken to simplify and consolidate the multi-layered structure of the company.
This scheme of arrangement was approved by shareholders of the company, the High Courts of Madras and Bombay with retrospective effect from January 1, 2010.
Regulatory authorities are yet to approve the scheme.
Cairn is waiting for its corporate restructuring to be over after which it will pay the dividend.
On June 24, 2010, Cairn India had informed the Indian stock exchanges about the High Court sanctions to the scheme of arrangement between Cairn India and its wholly owned subsidiaries – Cairn Energy India Pty Limited, Cairn Energy India West BV, Cairn Energy Cambay BV, Cairn Energy Gujarat BV.
The Board had already approved a dividend policy, which aims at a payout of around 20 per cent of the annual consolidated net profit.