CAIRN Energy, the Edinburgh oil and gas explorer that was transformed by major discoveries in India, has confirmed its largest field will produce 25 per cent more oil than it previously thought.
Cairn India – majority owned by Cairn Energy – revealed yesterday that it had submitted a reserve report on the giant Mangala field that forecast peak production of 125,000 barrels of oil a day. Earlier reports had predicted a peak of 100,000 barr
els a day.
Rahul Dhir, pictured, chief executive of Cairn India, said: "The revised reserve report for the Mangala oil field was submitted (to the regulator] in end-December." He added the report contained a forecast for output of 125,000 barrels per day.
The Mangala field, first drilled in 2004, is believed to be the largest discovered in India since 1985. Its discovery propelled Cairn, which had bought assets overlooked by the likes of Shell and BP, from the small cap index to the FTSE 100.
Rumours that the company had been conservative about its peak production estimates emerged months ago. At the company's interim results presentation in September, Cairn Energy chief executive Sir Bill Gammell declined to comment until technical data had been shared with the Indian government, but did little to play down the rumours.
"All I would say is that we continue to be impressed by the technical data on the fields," he told The Scotsman. "Good fields continue to get better and we certainly found world-class reserves in Rajasthan."
Cairn India has targeted peak oil production of 150,000 barrels a day from the entire Rajasthan block, which includes Mangala and three other fields. Cairn owns a 70 per cent stake in the Rajasthan block while state-run Oil & Natural Gas holds the remainder. The block is expected to produce oil for 25 years.
Cairn did not say whether it had raised its forecast for the total block in light of the new Mangala report. The fields require a 580-kilometre pipeline to coastal Gujarat, which received approval in September.
In early 2007, Dhir said his firm expected to produce 20 per cent of India's total crude output by the end of the decade.
Shares in Cairn Energy dipped 10p to 2,765p yesterday.
The full article contains 382 words and appears in The Scotsman newspaper.
