Cairn India Ltd, the operator of the Rajasthan oil block, says there is 12 per cent higher in-place potential resource (oil and gas reserves) in the block. The potential is now estimated at 7.3 billion barrels of oil equivalent (boe) up from 6.5 billion boe earlier.
“Positive results of the enhanced oil recovery pilot project, re-evaluation of the exploration potential in Rajasthan along with the discovered resource support a basin production potential of 300,000 barrels of oil a day (equivalent to a contribution of 40 per cent of the country's current output),” said Mr Rahul Dhir, Managing Director and Chief Executive Officer, Cairn.
He was quick to point out that this was subject to further investments and regulatory approvals. He said that the Rajasthan block was currently producing 175,000 barrels of oil a day.
Mr Dhir said crude oil sales arrangement had been renewed with buyers for volumes in excess of 175,000 barrels of oil a day. Cairn sells to domestic refiners – Indian Oil Corporation, Reliance Industries, and Essar Oil. Cairn's board also approved a dividend policy aimed at maintaining a payout at around 20 per cent of annual consolidated net profit.
Net down
Despite higher realisation from crude oil sales at $109 a barrel (against $79.1 a barrel), the company's (consolidated) net profit fell 11 per cent in the fourth quarter of 2011-12. This was attributed mainly to higher forex loss coupled with cess and royalty outgo. The net profit for the quarter stood at Rs 2,186 crore.
For the quarter, the company incurred forex loss of Rs 217 crore (Rs 38 crore) in the same period a year-ago. Cairn paid Rs 398.17 crore as cess during the fourth quarter against Rs 273.28 crore in the same period in fiscal 2011.
For this year, the net profit was up 25 per cent to Rs 7,937.7 crore from Rs 6,334.4 crore last year. The company's gross contribution to the national exchequer (excluding direct taxes) was approximately $650 million for the quarter and approximately $10 billion till date.
The shares of Cairn India closed at Rs 346.80 down by 1.08 per cent on Friday on the BSE.