Cairn Energy has signed a $1-billion syndicated bank
loan for developing its oil and gas assets in Rajasthan,
a move that clears the path for production from the
sites in 2008. Bill Gammell, chief executive of the
Edinburgh-based Cairn, said the firm is looking for
more investments in India and will bid for substantial
new acreage in the country's forthcoming licensing round.
already has an interest in 13 blocks, but up to 50 more
have been put up for grabs by the government in September's
Energy said it would pump enough oil and gas from a
series of big finds in India and repay $1bn borrowings
within 18 months of starting production. Gammell said
directors had calculated that debts incurred to develop
the fields in Rajasthan, including the big Mangala oil
block, should be cleared "pretty fast". "We
hope to repay it within 18 months (of commercial production)
by around 2010," he said following the signing
of the loan facility syndicated by 14 banks.
consortium of banks that arranged the revolving facility
included the Royal Bank of Scotland and Lloyds TSB Scotland
among others. The Bank of Scotland corporate arm of
HBOS also provided support for the revolving facility.
are delighted that the international banks have supported
this significant inward investment into India,"
meanwhile, is going ahead with plans to complete an
initial public offer of the Indian business on the Mumbai
Stock Exchange. The timing and scale of the IPO have
yet to be decided as the company is keenly watching
the volatile market. However, analysts expect the company
to float the IPO by the fourth quarter of this year
or latest by the first quarter of 2007.
group could float anything between 25 per cent and 80
per cent of the company, although Kevin Hart, finance
director of Cairn, said it was likely to let go less
than 50 per cent.
the upcoming Indian licensing round, Gammell said the
"actively" working on which blocks to go for,
with both on and offshore believed to be under consideration.
"The risks associated with India have been wrongly
assessed by the oil majors for many years," he