Cairn India Ltd has cut its capital expenditure guidance for the fiscal 2015-16 by over half to $500 million as it seeks to protect themselves in a falling crude oil price environment.
“The company is revising the capex for fiscal year 2015-16 from the projected $1.2 billion to $500 million, while deferring the rest. Despite the partial deferment of capex, the volumes will yet see growth in the coming fiscal,” the company said in a statement.
The company added that it will have the ability to make investments to enhance volumes, if necessary.
In the fiscal 2014-15, the company had spent $1.1 billion of capital expenditure.
“We would like to give confidence to our shareholders that we are more focused than ever to drive operational efficiencies in the current crude price environment,” said Mayank Ashar, Managing Director and CEO.
“Our cash rich balance sheet and cost profile provide a solid foundation to operate our high margin core fields. This gives us the option to be selective about growth projects in these challenging times,” he added.
Cairn also said that it will focus on undertaking projects that are economically viable at the current oil prices and management focus remains on re-engineering projects and re-negotiating contracts.
On Wednesday, Cairn India's shares closed 3.52 per cent lower on the BSE at ₹244.10.