Cairn India today reported a six-fold jump in its net profit in the quarter ended June 30 as it began selling large volumes of crude oil from its Rajasthan oilfield through a newly built pipeline.
Net profit rose to Rs 281.4 crore in April-June as compared to Rs 45.4 crore a year ago, the company said in a press statement.
Cairn is currently producing about 110,000 barrels per day from the Mangala oilfield in Rajasthan and is expected to reach peak output of 125,000 bpd sometime next month.
It started sales through the 590-km Barmer-Salaya pipeline in the quarter and is now selling about 100,000 bpd of Mangala crude oil to Reliance Industries, Essar Oil and Indian Oil Corp. It has tied-up sale for 143,000 bpd.
The company in June started a third crude processing train. It now has a capacity to process 130,000 bpd.
Cairn India Managing Director and Chief Executive Officer Rahul Dhir said: "Cairn India is fully focused on ramping up production from the Rajasthan fields with delivery from the Mangala field demonstrating potential to go above the currently approved plateau production of 125,000 bpd."
"With volumes being delivered to private and public refiners, the revenue generation from Rajasthan will provide significant growth and benefits," he said.
Cairn said it has so far invested USD 2.47 billion in the Rajasthan block.
Gross operated production in Q1 FY 2010-11 was 94,950 barrels of oil equivalent per day, 73 per cent higher than the corresponding quarter of the previous year (59,461 boepd).
Cairn said it realised USD 72 per barrel on crude sold in April-June quarter as compared to USD 60.2 per barrel a year ago. The gas price realisation in Q1 FY 2010-11 was USD 4.6 per thousand cubic feet versus USD 4 per thousand cubic feet for the corresponding quarter of the previous year.
The company sells Mangala crude at an average 10-15 per cent discount to Brent.
Turnover soared 210 per cent to Rs 840.6 crore in Q1.
The Mangala Field, which was discovered in January 2004, is the largest onshore oil discovery in India in more than 20 years. The Mangala, Bhagyam and Aishwariya (MBA) fields have gross recoverable oil reserves and resources of over 1 billion barrels.
Twenty other fields (including the Barmer Hill Formation) are estimated to hold approximately 1.9 billion barrels.