CHENNAI: The Mangla oil field in Rajasthan is expected to provide a big growth impetus to Cairn Energy, a pure play upstream oil company. Indicating this in an informal chat with The Hindu during a visit to the Ravva Onshore Terminal at Surasiyannam in Coastal Andhra Pradesh, Cairn Energy officials said the company was, in fact, bullish on Mangla.

The Rajasthan field, according to their estimate, could be worth a billion barrels of oil. The company had already said that it was hoping to get 40 per cent of it off the ground. The viscosity of oil in Rajasthan field was higher, making its upward flow that much difficult. Nevertheless, company officials were optimistic that they could extract 50 per cent more oil than they had projected from this filed. That could well mean another 200 million barrels, taking the total to 600 million barrels.

Company officials said that over 90 per cent of the reserves (proven and probable) of Cairn Energy Plc were in India. Giving an overview of the Ravva oil field, they said the oil production plateau at Ravva was sustained at 50,000 barrels a day since 1999. Efforts were on for plateau extension through infill wells. This, they said, would help the company sustain the production at this level through 2007.

The company had chalked out a programme to drill four wells in 2007 at Cambay Basin Offshore-2, they added.

The size of the main discoveries and the ongoing development in Rajasthan had significantly changed the nature of the group's business in India, both in terms of value and scale, they said. That explained Cairn Energy's recent decision to go in for a major re-jig of its business in India. As part of this exercise, the group had set up a fully owned subsidiary Cairn India Ltd and was now seeking to take the new entity public through a book-building route.

Following this re-jig move, the Group would have two arms in India - Cairns Energy India and Capricorn.

The group would hold a majority shareholding Cairns Energy India post-listing well. Capricorn, engaged in oil exploration and production, would be operated as a wholly owned subsidiary of the Group. Capricorn would focus initially on the Group's remaining assets in Bangladesh, Nepal and Northern India, but would additionally consider new material growth opportunities.

Even as the group has initiated action on taking the newly incorporated India venture to public, it had also decided to dispose of its Indian business to Cairn India in exchange for cash and the issue to the group of a majority shareholding in Cairn India. The offer price set for Cairn India's shares in the flotation would determine the value of the Indian business for the purpose of the disposal.

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