Cairn India on Thursday reported a three-fold jump in its net profit to Rs. 1,585 crore in the quarter ended September 30, as completion of a pipeline led to jump in crude oil sales from its profilic Rajasthan block.
Cairn reported a net profit of Rs 1,585.08 crore in the July-September period as against Rs 469.51 crore net income in the same period a year ago, the company said in a statement here.
The rise in net profit was mainly because July-September was the first full quarter when the company used the 590-km Barmer (in Rajasthan) to Salaya (in Gujarat) pipeline to sell crude oil produced from the giant Mangala oilfield to Reliance Industries, Essar Oil and Indian Oil Corp (IOC).
Prior to the comissioning of the pipeline, Cairn trucked the crude oil to the refineries.
Cairn sold 10 million barrels of Mangala crude through the pipeline to the refineries in Q2 2010-11 fiscal, the statement said.
“The first full quarter of sales through the pipeline to refineries has generated significant revenues from the Mangala field in Rajasthan,” Cairn India CEO Rahul Dhir said.
The pipeline has helped the company to quickly ramp up Mangala field output to peak levels of 125,000 barrels per day or 17 per cent of the nation’s domestic oil production.
Cairn said Mangala field has potential to produce even more, but the same would have to be approved by the oil ministry and the sector regulator DGH.
The company said turnover jumped over 10-fold to Rs 2,686.42 crore in the July-September quarter as opposed to Rs 229.78 crore in the year ago period.
It said it raised Rs 2,250 crore through an unsecured non-convertible debenture issue to retire existing loan.
Also during the quarter, Cairn Energy Plc announced a deal to sell up to 51 per cent in Cairn India to London—listed Vedanta Resources for $ 8.48 billion. Edinburgh-based Cairn Energy holds 62.38 per cent stake in Cairn India.
“This transaction has been approved by shareholders of Cairn Energy. The transaction continues to progress in a consensual way to secure the necessary consents and approvals from the various government authorities and stakeholders,” the statement said.
Cairn said it realised $ 69.5 per barrel for crude oil it sold in Q2 this fiscal as compared to $ 69.1 a barrel in the same period the previous period last year.
The gas price realisation in Q2 was $ 4.5 per thousand standard cubic feet (mscf) compared to $ 3.9 per mscf in Q2 FY 2009-10.
“The Rajasthan per barrel operating cost continues to decline as volumes increase,” it said.
The Mangala field, discovered in January 2004, commenced production a year ago.