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UPDATE 1-Cairn Energy unit gets $1.6 bln worth of loans
October 14, 2009 / 2:45 PM / 8 years ago

UPDATE 1-Cairn Energy unit gets $1.6 bln worth of loans

* Financing to help fund Cairn India’s Rajasthan project

* Funding to help accelerate development of India oilfields

(Recasts; changes dateline to MUMBAI, adds comment from company official, details, background)

By Pratish Narayanan

MUMBAI, Oct 14 (Reuters) - Cairn India (CAIL.BO), a unit of Cairn Energy (CNE.L), has secured loans worth $1.6 billion to fund its project in the western state of Rajasthan, potentially helping it accelerate development of its oilfields in the region.

Cairn India in late August began pumping crude from its Mangala oil field in the Rajasthan block, the first major crude oil discovery in the energy-hungry nation in two decades.

But Cairn Energy had warned that meeting targets for the next stages of the development of its Indian oilfields was becoming “increasingly challenging.”

Plateau production from Mangala is expected to reach 125,000 barrels per day in the first half of 2010, and peak production of 175,000 bpd is expected to start in 2011 from the three fields.

    “We stand by our guidance for now, but this latest financing will actually help us accelerate the project,” Cairn India Chief Financial Officer Indrajit Banerjee said by telephone.

    The loans were provided by Standard Chartered Bank (STAN.L), International Finance Corp and State Bank of India (SBI.BO), and have a six-year tenure. Rates were not disclosed.

    Cairn is developing three oil fields -- Mangala, Bhagyam and Aishwarya -- in the Rajasthan block.

    Cairn India holds a 70 percent stake in the RJ-ON-90/1 block in western India, while state-run explorer Oil & Natural Gas Corp (ONGC.BO) holds the balance. (Editing by Jarshad Kakkrakandy and Rupert Winchester)

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