Download - Corporate Presentation Feb 2011
CAIRN INDIACAIRN INDIACAIRN INDIACAIRN INDIA
Corporate Presentation
February 2011
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DisclaimerDisclaimerDisclaimerDisclaimer
These materials contain forward-looking statements regarding Cairn India, our corporate plans, future financial
condi t ion, future resul ts of operat ions, future business plans and strategies. Al l such forward- looking
statements are based on our management's assumptions and beliefs in the light of information available to
them at this time. These forward-looking statements are, by their nature, subject to significant risks and
uncertaint ies and actual results, performance and achievements may be material ly dif ferent from those
expressed in such statements. Factors that may cause actual results, performance or achievements to differ
from expectations include, but are not limited to, regulatory changes, future levels of industry product supply,
demand and pricing, weather and weather related impacts, wars and acts of terrorism, development and use
of technology, acts of competitors and other changes to business conditions. Cairn India undertakes noof technology, acts of competitors and other changes to business conditions. Cairn India undertakes no
obligation to revise any such forward-looking statements to reflect any changes in Cairn India’s expectations
with regard thereto or any change in circumstances or events after the date hereof.
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Holding StructureHolding StructureHolding StructureHolding Structure
IPO December 2006
Listed on BSE & NSE in January 2007
Part of NIFTY index, MSCI & DJIT30Part of NIFTY index, MSCI & DJIT30
Over 200,000 Indian retail shareholders
Market Cap >USD13 bn; amongst India’s top 20
Total Equity of 1,901m shares; Free float >37.8%
MSCI: Morgan Stanley Composite Index, DJIT30: Dow Jones India Titans 30 IndexAs on 2nd Feb 2011
Promoter62.23%
Petronas14.91%
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World Class Asset BaseWorld Class Asset BaseWorld Class Asset BaseWorld Class Asset Base
Cambay (CB/OSCambay (CB/OSCambay (CB/OSCambay (CB/OS----2)2)2)2)
Rajasthan (RJRajasthan (RJRajasthan (RJRajasthan (RJ----ONONONON----90/1)90/1)90/1)90/1)
Cairn (Operator) 70%
ONGC 30%
Production BlocksProduction BlocksProduction BlocksProduction Blocks Exploration PotentialExploration PotentialExploration PotentialExploration Potential
East CoastEast CoastEast CoastEast Coast
KG-DWN-98/2 WI 10%
KG-ONN-2003/1 WI 49%
PKGM-1 (Ravva) WI 22.5%
RajasthanRajasthanRajasthanRajasthan
RJ-ON-90/1 WI 70%
Cambay (CB/OSCambay (CB/OSCambay (CB/OSCambay (CB/OS----2)2)2)2)
Cairn (Operator) 40%
ONGC 50%
Tata Petrodyne 10%
Ravva
Cairn (Operator) 22.5%
ONGC 40%
Videocon 25%
Ravva Oil 12.5%
Sri LankaSri LankaSri LankaSri Lanka
SL-2007-01-001 WI 100%
PKGM-1 (Ravva) WI 22.5%
KG-OSN-2009/3 WI 100%
PR-OSN-2004/1 WI 35%
West CoastWest CoastWest CoastWest Coast
CB/OS-2 WI 40%
KK-DWN-2004/1 WI 40%
MB-DWN-2009/1 WI 100%
Q3 FY 2010-2011 - Gross operated production ~174,282 boepd; Cairn (WI)~100,270 boepd
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Growth StrategyGrowth StrategyGrowth StrategyGrowth Strategy
Maximise recovery fromproduction base
Execute Rajasthan
development
MaximisePotential in Rajasthan
Identifynew growth opportunities
Increased Ravva
reserves by 20% in
2010
Mangala current
production:125kbopd;
potential to reach 150
>3,000 km2 in Barmer
Basin under contractFrontier exploration
drilling to commence
in Sri Lanka2010
>15 years of low cost
operations in Ravva
Completed 4D
seismic campaign in
Ravva; infill drilling
commenced
GBA agreement for
sharing gas from the
shared reservoir in
CB/OS-2
potential to reach 150
kbopd*
Crude transports
through Pipeline
MBA approved peak
production at 175
kbopd
Increased recovery
through EOR; pilot
ongoing
Growing resource
base; increased from
4 to 6.5 bn boe
Monetise Barmer Hill
& Other Fields; BH
DOC filed, FDP
under preparation
Vision to produce 240
kbopd**
in Sri Lanka
Exploration and
Appraisal drilling in
KG-ONN-2003/1
Assessing new plays
in Rajasthan
Existing portfolio
enhancement
GBA: Gas Balancing Agreement, * subject to JV and GoI approval, ** subject to JV and GoI approval & additional investments
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Financial Highlights Financial Highlights Financial Highlights Financial Highlights –––– Nine Months FY 2010Nine Months FY 2010Nine Months FY 2010Nine Months FY 2010----11111111
� Net Revenue at USD 1.5 billion
� EBIDTA stands at ~USD 1.2 billion
� Profit after tax realized at USD 851 million
� Cash Flow from Operations stands at USD 900 million� Cash Flow from Operations stands at USD 900 million
� EPS at INR 20.4 per share
� Net Cash of USD 194 million as on 31st December 2010
� Gross cumulative Rajasthan development capex at USD 2,816 million
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Financial HighlightsFinancial HighlightsFinancial HighlightsFinancial Highlights
67
69
95
165
174
Q3 FY10
Q4 FY10
Q1 FY11
Q2 FY11
Q3 FY11
Gross Production
106
151
184
577
691
Revenue
0 25 50 75 100 125 150 175 200
Kbopd
0 100 200 300 400 500 600 700
62
53
62
341
448
0 100 200 300 400 500
Q3 FY10
Q4 FY10
Q1 FY11
Q2 FY11
Q3 FY11
PAT
USD Million
59
76
108
337
455
0 100 200 300 400 500
Cash Flow from Operations
USD Million
USD Million
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Rajasthan Rajasthan Rajasthan Rajasthan ---- Frontier to Producing Basin Frontier to Producing Basin Frontier to Producing Basin Frontier to Producing Basin
Development & ProductionExploration & Appraisal
AishwariyaBhagyam
Mangala
Oil
Gas
Mangala
Processing
Terminal
Frontier Exp.
1995 - 2002
ViramgamGujarat
Rajasthan
Koyali
Tankers to
Coastal Refineries
Jamnagar / Salaya
Kandla
�
Bhogat
Raageshwari
25 discoveries to date
>3,000 km² approved development area
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Rajasthan UpdateRajasthan UpdateRajasthan UpdateRajasthan Update
� Mangala Processing Terminal (MPT) Trains 1, 2 & 3
commissioned
� Construction activity on Train 4 commenced; expected to
commission in H2 CY 2011 to take MPT capacity to
205,000bopd
� Mangala production ~125,000 bopd; Gross field revenue in
excess of USD 2 billion
MPT
Pipeline
� 4 rigs operating, 125 Mangala wells drilled; 84 completed, 55
producing including 11 Horizontal wells
� Produced and sold >27.5 mmbbls to domestic refiners.
� Surface facility and midstream infrastructure ready to support
Mangala production of 150,000 bopd; subject to Joint Venture
and GoI approval
� Bhagyam development drilling commenced; 14 wells drilled to
date, expected to commence production in H2 CY 2011
� Design optimisation of Aishwarya field underway; production
scheduled in H2 CY 2012 subject to JV and GoI approval
Total Pipe Diameter
790 mm (32”)
Poly Urethane
Foam Insulation
Heat Tube
High Density
Polyethylene Wrap
Data as per 10 Feb 2011 press release
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Rajasthan Rajasthan Rajasthan Rajasthan ---- Crude Marketing Crude Marketing Crude Marketing Crude Marketing
� Worlds longest continuously heated & insulated
pipeline operational
� Sales arrangements in place for 143,000 bopd
• With PSU & Private refineries
• Further sales to PSU refiners, Special Economic Zone
refiners and overseas - subject to GoI approval
Mangala
Delivery through ~590 km
heated pipeline
from Barmer to Salaya
Radhanpur
• Discussions continue with GoI for further nominations
� Crude Pricing
• Reference to comparable low sulphur crude - Bonny
Light
• Price represents a 10-15% discount to Brent on basis
of prices prevailing for 12 months to December 2010
� Completion of Salaya to Bhogat section of pipeline
including Bhogat terminal and marine facility scheduled
for H2 CY 2012
• Access to 75% of India’s refining capacity
Viramgam
KoyaliJamnagar
/ Salaya
Kandla
Radhanpur
Bhogat
RefineryRefineryRefineryRefinery
Existing PipelinesExisting PipelinesExisting PipelinesExisting Pipelines
Pipeline RoutePipeline RoutePipeline RoutePipeline Route
Tankers to Coastal RefineriesTankers to Coastal RefineriesTankers to Coastal RefineriesTankers to Coastal Refineries
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Rajasthan Rajasthan Rajasthan Rajasthan ---- Future Resource And Value PotentialFuture Resource And Value PotentialFuture Resource And Value PotentialFuture Resource And Value Potential
Gross Initial
In Place
Volumes
20 additional20 additional20 additional20 additional
discovereddiscovereddiscovereddiscovered
fields including fields including fields including fields including
~4 Billion ~4 Billion ~4 Billion ~4 Billion boeboeboeboe
~6.5 Billion boe~6.5 Billion boe~6.5 Billion boe~6.5 Billion boe
ContingentIn Place
In Place
Prospective
Most Likely
GasGasGasGas
GIIP GIIP GIIP GIIP
OilOilOilOil
STOIIPSTOIIPSTOIIPSTOIIPMBA MBA MBA MBA
308308308308
140140140140
BHBHBHBH+ Others+ Others+ Others+ Others
Risked
Prospective
Resource
250250250250
~2.5 Billion ~2.5 Billion ~2.5 Billion ~2.5 Billion boeboeboeboe inininin
35+ prospects35+ prospects35+ prospects35+ prospects
Gross Reserves,
Resources 1111 and Potential2222
1111 The independent estimates of Reserves and Contingent Resources recently
mmbblsmmbblsmmbblsmmbblsmmbblsmmbblsmmbblsmmbbls
fields including fields including fields including fields including
BarmerBarmerBarmerBarmer HillHillHillHill
MBA Fields,MBA Fields,MBA Fields,MBA Fields,
RaageshwariRaageshwariRaageshwariRaageshwari
and and and and SaraswatiSaraswatiSaraswatiSaraswati
FDP approvedFDP approvedFDP approvedFDP approved
2.1 Billion boe2.1 Billion boe2.1 Billion boe2.1 Billion boe
In Place
MBAMBAMBAMBASTOIIPSTOIIPSTOIIPSTOIIP
R & S STOIIP
1,2931,2931,2931,293
MMMM
468468468468
BBBB
293293293293
AAAA
78787878
R & SR & SR & SR & S
STOIIPSTOIIPSTOIIPSTOIIP
ContingentContingentContingentContingent
ResourceResourceResourceResource
R & S 12R & S 12R & S 12R & S 12
MMMM477477477477
BBBB151151151151
A 66A 66A 66A 66
707707707707
2P+2C2P+2C2P+2C2P+2C
MBA MBA MBA MBA EOREOREOREOR
MBA EORMBA EORMBA EORMBA EORBarmerBarmerBarmerBarmer HillHillHillHill
+Other Fields+Other Fields+Other Fields+Other Fields
RiskedRiskedRiskedRisked
Prospects, Prospects, Prospects, Prospects,
Leads & Leads & Leads & Leads &
ConceptsConceptsConceptsConcepts
and Contingent Resources recently carried out by D&M are in line with the CIL estimates
2222 Top 35 prospects audited by D&M risked resource 178 mmbbls
Data as per 23rd March 2010 press release
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Rajasthan Rajasthan Rajasthan Rajasthan ---- Vision For GrowthVision For GrowthVision For GrowthVision For Growth
FDP FDP FDP FDP Approved Approved Approved Approved Production Production Production Production
Target
Potential
Production
240,000 bopd
MBAMBAMBAMBA
MangalaMangalaMangalaMangalaProcessing TerminalProcessing TerminalProcessing TerminalProcessing Terminal
• Reservoir Performance• EOR Pilot Implementation• BH Pilots and Development• Exploration and Appraisal
Technical and Operational
FDP FDP FDP FDP ApprovedApprovedApprovedApprovedProductionProductionProductionProduction175,000175,000175,000175,000bopdbopdbopdbopd
Production Production Production Production CapacityCapacityCapacityCapacity
205,000 205,000 205,000 205,000 bopdbopdbopdbopd
240,000 bopd
• JV Approvals• Additional SalesRegulatory
• Facilities and pipeline• EOR full field implementation• BH staged development• Exploration
Investment
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Exploration Exploration Exploration Exploration ProgrammeProgrammeProgrammeProgramme
KG-ONN-2003/1
Nagayalanka-1Z discovered;
RJ-ON-90/1
Assessing new plays, generate new prospects
� Major long term player� Large proprietary database � Experienced team� Successful exploration over 10
years: Success ratio ~50%
� Play based approach to building portfolio� Diversity of basin, plays and environments� Ongoing regional petroleum system studies � “Drill Bit exploration”: >190 exploratory
/appraisal wells
RAVVAInfill drilling commenced
Nagayalanka-1Z discovered; Further Exploration &
Appraisal drilling end 2011
PR-OSN-2004/1
Under Force Majeure
SL-2007-01-001Logistical preparations and
detailed studies ongoing; Drilling planned to commence in July 2011
– 3 wellsSRI LANKA
KK-DWN-2004/1
Completed 300 km2 3D
NON-OPERATED
OPERATED
I N D I AI N D I AI N D I AI N D I AMB-DWN-2009/1
Exploration activity commenced
KG-DWN-98/2
3 appraisal wells
KG-OSN-2009/3
3D seismic planned in Q4 FY2011-12
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Exploration Exploration Exploration Exploration ---- Sri Lanka Block (SL 2007Sri Lanka Block (SL 2007Sri Lanka Block (SL 2007Sri Lanka Block (SL 2007----01010101----001) 001) 001) 001)
India
� Cairn Lanka 100% Working Interest (NOC back-
in 15%)
• Block Area: ~3000 km2
• Water depth: 400-1900m
� Extension of proven hydrocarbon play (Cauvery
/ Mannar)
SRI LANKA
50km
SL 2007 01 001SL 2007 01 001SL 2007 01 001SL 2007 01 001
� Under explored, frontier basin with multiple
plays
� Exploration Program
• Drilling to commence in July 2011; 3 wells
planned
• 5th generation drillship rig contracted
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Rajasthan Rajasthan Rajasthan Rajasthan ---- FundingFundingFundingFunding
CapexCapexCapexCapex GrossGrossGrossGross NetNetNetNet
ExplorationExplorationExplorationExploration (till 2006)*(till 2006)*(till 2006)*(till 2006)* 0.610.610.610.61 0.570.570.570.57
DevelopmentDevelopmentDevelopmentDevelopmentCY 2007CY 2007CY 2007CY 2007 0.310.310.310.31 0.220.220.220.22
Financed ByFinanced ByFinanced ByFinanced By
� Net Cash 0.2(31st Dec’10)
� Existing debt facility 1.30
USD billion
CY 2007CY 2007CY 2007CY 2007 0.310.310.310.31 0.220.220.220.22
CY 2008 & 2009CY 2008 & 2009CY 2008 & 2009CY 2008 & 2009 1.761.761.761.76 1.231.231.231.23
CY2010 & 2011 (CY2010 & 2011 (CY2010 & 2011 (CY2010 & 2011 (EstEstEstEst) ~2.00) ~2.00) ~2.00) ~2.00 ~ 1.40~ 1.40~ 1.40~ 1.40
TotalTotalTotalTotal 1.501.501.501.50
Additional SourcesAdditional SourcesAdditional SourcesAdditional Sources
� Cash flow from producing blocks ie Rajasthan, Ravva and CB
****Exploration Cost: During the initial years the entire exploration costs was borne by Cairn India and hence the net number is > 70%.
On a gross basis the company has spent USD 748m on RJ development in CY 2010
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Engaging with the CommunityEngaging with the CommunityEngaging with the CommunityEngaging with the Community
Strategic Intent
� Proactive engagement with stakeholders
� Demonstrate leadership in corporate citizenship
� Partnering with communities through our
principles of respect, relationship and
responsibility
Areas of Focus
� Education
� Infrastructure
� Health
� Economic
Development
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SummarySummarySummarySummary
� Rajasthan
• Mangala production at its currently approved plateau of 125,000 bopd
• Delivery to domestic refiners through pipeline
• Increasing cash flows; Gross field revenue crossed USD 2 billion
• Enhanced oil recovery potential; pilot ongoing
• World class resource base – focussed on delivery & growth
• Vision to produce 240,000 bopd
• Strong economic contribution to the State of Rajasthan and Government of India
• Won nine safety awards in the 24th Mine Safety awards for Rajasthan Operations
� Maximise production from Ravva and CB
� Proven record of fast track, low cost development and production
� Success through innovative application of technology
� Increasing exploration potential; enhanced resource base through NELP VIII
� Net Cash of USD 194m as on 31st Dec 2010