Cairn wants to sell its India and Bangladesh assets

Vol 6, PW 6 (22 May 02) People & Policy

It's a secret no more! Cairn Energy wants to sell its exploration and production assets in India and Bangladesh and has commissioned Deutsche Bank to value its properties.

According toDeutsche Bank, Cairn's Bangladesh assets are worth $287m and its India assets $415m. Why does Cairn want to sell It's no secret the Edinburgh-based explorer is short of cash and doesn't want to finance its ambitious deepwater exploration programme offshore eastern India with debt.

"Our share price would collapse if we did that," reveals a source. Cairn operates all six of its blocks in India.

In Bangladesh it holds equity (but doesn't operate) an equal number. Here, Shell operates five and Unocal one.

Ideally Cairn wants to sell its South Asian portfolio as a package. But we reliably learn it is open to the "right" offer for individual fields.

"Bill Gammell (Cairn's CEO) has always said we'll sell any of our assets if the price is right." Not in doubt is that Cairn wants to quit Bangladesh, disenchanted at prospects of gas exports to India. "We are not a company to sit on cash flow indefinitely.

We want to monetise it." Cairn wants to retain a presence in some Indian blocks: it's ready to sell its 22.5% stake in Ravva and its 75% stake in CB-OS-2, but only wants to sell three quarters of its interestin KG-OS/6 and deepwater block KG-DWN-98/2, while keeping RJ-ON-90/1 in Rajasthan. A source tells us Cairn would like to transfer resources or shares and receive payment within five or six months of an interested buyer beginning due diligence.

What are the estimated reserves in each field How much money is Cairn looking for See below.