UK-based oil firm Cairn Energy plans to create a separate unit out of its Indian operations and sell at least 25 per cent shares of the new firm through an initial public offering.
"We plan to split the company into two -- one based in India focused on exploration and production and (the other) based in the UK focussed on (Cairn's core competence) exploration," a company spokesperson said.
The Indian firm will hold the prolific Rajasthan block, where Cairn estimates it has found in-place oil reserves in excess of 3.5 billion barrels, the 22.5 per cent stake in the 50,000 barrels per day Ravva offshore oilfield and the Cambay Basin block CB/OS-2, home to 130 million standard cubic feet per day producing Lakshmi and Gauri gas fields and a potential oilfield.
An IPO of at least 25 per cent shareholding would be launched in 2008, before the oil production starts from Mangala, Bhagyam and Aishwarya fields - the largest finds in the Rajasthan block, he said.
"We estimate more than 3.5 billion barrels of oil at Rajasthan block and that the figure may increase further," Cairn Energy India Pty Ltd managing director Lawrence Smyth said.
The company estimates peak production at its Mangala, Bhagyam and Aishwarya fields in northern part of the Rajasthan block could be as much as 150,000 barrels of oil per day, compared with an estimate of 60,000 to 100,000 barrels about 18 months ago.
Southern fields, Saraswati and Raageshwari, would start producing oil at the rate of 2000-3000 barrels per day from second quarter 2006, the spokesperson said.
Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Discussion Group