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Panoramic view of the Mangala processing facility at Barmer, Rajasthan
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Market
Achievements
More than foresight, more than endeavour, more than entrepreneurial skills, India will need oil if it has to meet its targeted annual economic growth of 9%. The arithmetic is simple. Currently, India’s per capita energy utilisation is a low 141 kilograms of oil equivalent (KOE) versus a global average of 972 KOE and the US average of 5065 KOE (Source: International Energy Outlook – IEO). Given its current base India's energy needs will have to take several quantum leaps for tomorrow’s infrastructure to be energised and will need to invest about US$ 150 billion (Rs. 675,000 crore) in exploration and production in the course of the next five years (Source: Ministry of Petroleum & Natural Gas). As of January 2010 India had approximately 5.60 billion barrels of proven oil reserves – after China the second largest in the Asia-Pacific region (Source: Oil and Gas Journal). By factoring in her 5 million-barrels-per-day requirement in twenty years from now, India’s reserves are woefully inadequate. In fact, it is estimated that by 2031 the country will be importing almost 93% of its oil and 11% of its gas requirements (Source: industry estimates).
Cairn India has had a distinguished fifteen years in India. During this period, it has played an active role in developing oil and gas resources across the country. Ravva, in Eastern India, was the first offshore oil and gas field to be developed by Cairn. This was followed by the Lakshmi gas field in the Cambay Basin off the Gujarat coast in May 2000, Gauri in 2001 and, its most notable find, Mangala in Rajasthan in 2004 – the largest onshore discovery in India in more than twenty years. This field was dedicated to the nation by the Hon'ble Prime Minister of India, Dr. Manmohan Singh, on 29th August 2009. With the intent to develop the Rajasthan fields quickly, Cairn India, within two months, completed financing arrangements for US$ 1.60 billion (approximately Rs. 7200 crore). The financing was arranged through a combination of US dollar and Indian rupee borrowing by accessing both domestic and international markets. For the alacrity it showed in sewing up the financing arrangement, the company received the Oil & Gas Deal of the Year – 2009 award for the AsiaPacific region by Project Finance International, a division of the Thomson Reuters Group. Concurrent to these efforts has been Cairn’s evacuation of the Mangala crude from Rajasthan. From its source in Barmer, the oil is pumped through a ~590-kilometre long pipeline that stretches across the sand dunes to Salaya unloading its contents to private refiners in Gujarat and the Indian Oil Corporation. This has the distinction of being the world’s longest continuously heated and insulated pipeline. Always conscious of the needs of the community, Cairn India developed a micro vendor programme. This initiative equips small businesses to manufacture and supply select components to Cairn facilities at Ravva and other corporate houses. This effort was recognised when it received the TERI Corporate Award for Social Responsibility in 2008. On the business front, too, Cairn India has been a powerful influence. The company was
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awarded a AAA rating by the Credit Analysis and Research Limited (CARE) in March 2010 for its domestic borrowing of Rs. 4000 crore (US$ 888.90 million) which is helping finance the development of world-class oil fields in Rajasthan. Cairn India’s contribution to the country’s energy security has been no less newsworthy.
It has produced more than 225 million barrels from Ravva alone and contributed more than US$ 4 billion (Rs. 18,000 crore) in profit petroleum to the Government of India. It’s hardly surprising then that the company’s managing director and chief executive officer, Rahul Dhir, received the prestigious Young Entrepreneur Award in the OCEANTEX World Expo 2010. The strong foundations developed by Cairn and the goodwill it has earned has also won the company public support. The company’s initial public offering (IPO) in 2007 was the largest IPO in the Indian primary equity market at that point in time. The company’s stock is listed on the National and Bombay Stock Exchanges. Its market capitalisation now stands at more than Rs. 63,000 crore (US$ 14 billion).
History Cairn entered India on the back of a widespread belief that greater effort needed to
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be expended in the exploration and production (E&P) of oil. Today, Cairn is one of the largest independent oil and gas E&P companies in India. It is headquartered in Gurgaon near Delhi and commands material E&P interests in ten blocks in India and one in Sri Lanka. Today, Cairn produces oil and gas from three operating assets – the Ravva field in Andhra Pradesh, CB/OS-2 block in the Cambay Basin in Gujarat and RJ-ON-90/1 block in Barmer, Rajasthan. The significance of these discoveries, particularly after the failure of several other companies, can best be realised by measuring the contribution they make to India’s quest for economic liberation. The recoverable oil reserves, for instance, in Mangala, Bhagyam and Aishwariya are estimated at about one billion barrels. This includes proven plus probable (2P) gross reserves and resources of 694 million barrels of oil equivalents (MMBOE) with a further 300 MMBOE or more of enhanced oil recovery (EOR) potential. Cairn has so far made 25 discoveries in the Rajasthan block. When the company here reaches the current approved plateau production rate of 175,000 barrels of oil per day (BOPD) in 2011 it will account for more than 20% of India's domestic crude oil production.
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This plant, 40% owned by Cairn India, is ISO 14001 certified and has also been granted OSHAS 18001 certification. The Mangala processing terminal is Cairn India’s largest processing facility. It is spread over 1.60 square kilometres and processes crude from the Mangala, Bhagyam and Aishwariya fields. It is designed to process 205,000 BOPD of crude and is expected to attain this capacity in 2011. The infrastructure that supports this facility includes 500 kilometres of pipelines and 80 kilometres of inter-field roads. Natural gas from the Rajasthan fields is being used for generating steam which in turn will power its processing requirements and heat the crude export pipeline.
Recent Developments With continuous capacity expansion, Cairn now produces about a fifth of the country’s domestic crude oil. To transport this crude oil, it commissioned the world's longest continuously heated and insulated pipeline in June 2010. This national asset represents one of the first steps in creating a world-class energy infrastructure for India. 2010 has been a busy year for Cairn. The company celebrated one year – and the production of 16 million barrels of oil – from the Mangala field in August 2010. In another exciting new development, Cairn received petroleum exploration licences for two blocks, KG-OSN-2009/3 and MB-DWN-2009/1, awarded under the eighth bidding round of the New Exploration Licensing Policy (NELP). The company has now embarked on a new and aggressive policy to expand its activities
Product The company produces crude oil and natural gas – from it Ravva, Cambay and Rajasthan operations. During the 2010 calendar year, it cumulatively produced 41.21 MMBOE of crude oil – including condensate – and 4.91 MMBOE of gas. In the Ravva field, Cairn has a 22.50% participating interest. This project is in partnership with ONGC, Videocon and Ravva Oil. The assets comprise a 225-acre onshore processing facility at Surasaniyanam, eight offshore unmanned platforms, 170 kilometres of sub-sea pipelines and a single point mooring. The processing capacity of this ISO 14001 certified plant is 70,000 BOPD and 95 million standard cubic feet per day (MMSCFD) of natural gas. The Suvali terminal, operated in partnership with ONGC and Tata Petrodyne, is an 82-acre onshore processing facility with a capacity of 10,000 BOPD of crude oil and 150 MMSCFD of natural gas. The Suvali terminal processes the oil and gas produced from the CB/OS-2 block.
top quartile performance ranking in lost time injury frequency rate (LTIFR) and total recordable incident frequency rate (TRIFR). Cairn also launched the Cairn Incident Management System in 2009 for better reporting and investigation of incidents and near-misses. It tracks preventative actions and submits all incidents, accidents and near-misses for detailed analysis. In collaboration with the Government of Rajasthan, the company manages the Enterprise Centre, which imparts vocational training in various fields to the local youth of Barmer. Cairn’s community engagement initiatives are designed to enrich the lives of the people in all the regions in which it operates.
Brand Values The brand stands for innovative thinking and a ‘can-do’ attitude. The four key values that drive the company encompass a pioneering spirit that experiments without fear of failure and provides leadership that is committed to meeting challenges; teamwork that places collective goals ahead of individual interests and accepts other’s view points and perspectives; respect for people and the environment so that cultural differences have no place and the things that bind people together are health, safety and security; and ownership that impels people to become accountable and take responsibility for delivery on commitments.
www.cairnindia.com Use of innovative methods to impart education
beyond Indian shores. It is currently evaluating global opportunities for the acquisition of foreign assets that would enhance its business plans and vision.
Promotion
To ensure that Cairn India is ready to face future challenges it has evolved a curriculum to enhance the skill sets of its team even as it has an ongoing programme to upgrade installations. The success achieved by the company in accelerating the production from the Mangala field to 125,000 BOPD within a short span of one year is one of the finest self-evident promotional testaments that a company can hope for. During business operations, Cairn’s workers and managers constantly spread the message that the company is committed to providing a safe working environment to its employees, a business-friendly atmosphere for its customers and is a concerned and devoted partner to the community. A comprehensive safety, health and environment management system is in place in all its operating units and installations. The company has achieved global industry-wide Welding activity on the Mangala Development Pipeline
Things you didn’t know about
Cairn Cairn pioneered deepwater exploration in India Four of the eight significant oil and gas discoveries in India since 2000 have been made by Cairn Mangala in Rajasthan is the largest onshore hydrocarbon find in India in the last twenty years The Ravva field was developed from 3700 BOPD to 35,000 BOPD in a record 26 months The Lakshmi gas field went from discovery to production in 28 months Horizontal wells in the Mangala field in Rajasthan tested at a rate of more than 11,500 BOPD – the highest-ever production rate for a single onshore well in India The Mangala development pipeline has entered the Limca Book of Records as the world’s longest continuously heated and insulated pipeline Cairn India secured US$ 1.60 billion (approximately Rs. 7200 crore) of funding through the reserves based lending model
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