New Delhi, January 22Cairn India’s third quarter financials have taken hit due to a steep fall in crude oil prices. The company’s consolidated net profit for the quarter ended December 31 fell 53 per cent to ₹1,350 crore against ₹2,884 crore in the year-ago period.
The consolidated net revenues also fell around 30 per cent to ₹3,504 crore, compared with ₹5,000 crore in the corresponding quarter last year.
Cairn sells its Rajasthan crude at a discount of Brent. For the third quarter of the current fiscal, the company sold it at 10.8 per cent discount. The average realisation from Rajasthan during the quarter was $68.3 a barrel. The operating expense in Rajasthan was $5.7 a barrel.
In the October-December quarter, Brent averaged at $76.58 a barrel. From the previous sequential quarter (July-September 2014), Brent has fallen by almost $25.35 a barrel.
The company said in a statement its average price realisation across its assets during the quarter was $68.1 a barrel of oil equivalent, nearly 28 per cent lower than $94.9 a barrel of oil equivalent in the same quarter last year.
On Thursday, Cairn India’s shares closed 0.27 per cent higher at ₹238.70 on the BSE. “We continue to drive operational efficiencies in the current crude price environment. Our cash-rich balance sheet… gives us the optionality to be selective about growth projects, contingent upon the oil price environment,” said Mayank Ashar, Managing Director and Chief Executive, Cairn India.
Rajasthan oilfields
Cairn’s maximum revenues come from Rajasthan’s oil fields. The production from Rajasthan was 16.6 million barrels of oil equivalent (oil plus some gas) during the quarter at an average of 180,010 barrels of oil equivalent a day.
During the quarter, an average of 179,305 barrels of oil a day was sold to Indian Oil, Essar and Reliance Industries’ refineries. Gas sales during the quarter stood at 10 million standard cubic feet a day amounting to total sales of 0.9 billion standard cubic feet.
Gas prospects
Rajasthan is essentially an oil-producing field, but Cairn and its joint venture partner ONGC are also betting on gas prospects from the area. The joint venture is leaving no stone unturned to exploit the full resource base of 300,000 barrels of oil equivalent a day from its Barmer block.
In fact, Cairn has successfully conducted road shows in Calgary (Canada) and Houston (US) to tap into the oil field services companies, offering technology and technical solutions.
Calgary and Houston are major hubs for oil field services companies that have taken significant strides in providing oil field technical solutions.