Cairn's Indian revenues near $1bn

REVENUE from Cairn Energy's Indian operations are close to reaching $1 billion (£626.5 million) since sales from its Rajasthan pipeline began in June, the Edinburgh-based explorer revealed yesterday.

The firm said last month that it had been able to scale up production at the Mangala oil field in Rajasthan and that its Indian division aimed to substantially increase production capacity in the near future.

Current production is running at 125,000 barrels of oil per day (bopd), or 17 per cent of India's domestic oil production.

In yesterday's third-quarter update, Cairn confirmed it was in the process of securing "necessary consents and approvals" from the Indian government for the sale of a majority stake in Cairn India to Vedanta Resources for $8.48bn (5.3bn).

Revenues at Cairn India in the three months to end-September were up 220 per cent on the previous quarter and up ten-fold on the same period last year.

Overall, the success helped Cairn almost double gross daily production. It surged to 169,709 barrels of oil per day in the third quarter, up 94 per cent on the first half of 2010.

The news came just days after Cairn disappointed investors with a lacklustre report on its Greenland drilling project, announcing it had abandoned two of its three exploration wells at the end of the Arctic exploration season.

Cairn said yesterday that total costs for the 2010 Greenland drilling programme were expected to be around $400m, in line with earlier guidance.

Chief executive Sir Bill Gammell said: "Exploration in Greenland is at an embryonic stage but the fact that we have encountered both gas and oil during this campaign, in a previously undrilled geological basin, is extremely encouraging."