Other States - Rajasthan   

Cairn Energy gets billion-dollar loan for oilfield project

Special Correspondent

Crude production likely soon

JAIPUR: Cairn Energy has obtained a loan worth 1 billion U.S. dollars (Rs. 4,600 crores) from the International Syndicate Bank Group for development of oilfields in western Rajasthan. The loan contract was signed at a function in New Delhi on Tuesday in the presence of Union Petroleum Minister Murli Deora and Rajasthan Chief Minister Vasundhara Raje.

The investment, said to be the biggest ever in the desert State, will be used for development of a 1,859 square km region in the Barmer-Sanchore basin where mining lease has been given to Cairn Energy. The explorations by the British oil firm have led to the discovery of 480 million tonnes of crude oil, 14.6 million tonnes of heavy oil and 15,000 million cubic metre natural gas.

Ms. Raje said the vast reserves of oil and gas would bring prosperity to Rajasthan, adding that the State was expecting Cairn Energy to start production of crude oil in two of the oilfields from October this year. "The petroleum sector is set to become the growth engine of Rajasthan in the next few years,'' she added.

Farmers compensated

State Mines and Petroleum Minister Laxminarain Dave said the unprecedented investment by Cairn Energy would provide direct and indirect employment opportunities to thousands of people and help transform the State's economy. He said the oil explorer had already paid a compensation of 9-lakh U.S. dollars to farmers whose land was acquired or crops were damaged.

Mr. Dave said Cairn Energy would spend 150 million U.S. dollars on general amenities and 850 million dollars on development of oilfields. Of the total loan amount, 150 million dollars were obtained from the World Bank's private sector arm International Finance Corporation for nine years and 850 million dollars from 13 banks for five years.

The funds will be used to develop the Mangala, Aishwarya, Saraswati and Rageshwari oilfields. The oil find in the Barmer-Sanchore basin is considered the biggest on-land deposit in the country so far. Mr. Dave said Cairn Energy also proposes to install a 50-MW power station by using the gas obtained from Rageshwari deep gasfield.

Among others, Cairn Energy Chief Executive Bill Gammell, Director of International Finance Corporation Rashad Kaldeni, Collin Boucefield of Royal Bank of Scotland, and Cairn Energy's Financial Director Kevin Heart attended the loan contract signing ceremony.

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