MarketMore than foresight, more than endeavour,more than entrepreneurial skills, India will needoil if it has to meet its targeted annualeconomic growth of 9%.The arithmetic issimple. Currently, India’s per capita energyutilisation is a low 141 kilograms of oilequivalent (KOE) versus a global average of 972KOE and the US average of 5065 KOE (Source:International Energy Outlook – IEO). Given itscurrent base India's energy needs will have totake several quantum leaps for tomorrow’sinfrastructure to be energised and will need toinvest about US$ 150 billion (Rs. 675,000 crore)in exploration and production in the course of the next five years (Source: Ministry ofPetroleum & Natural Gas).

As of January 2010 India had approximately5.60 billion barrels of proven oil reserves – afterChina the second largest in the Asia-Pacificregion (Source: Oil and Gas Journal). Byfactoring in her 5 million-barrels-per-dayrequirement in twenty years from now, India’sreserves are woefully inadequate. In fact, it isestimated that by 2031 the country will beimporting almost 93% of its oil and 11% of itsgas requirements (Source: industry estimates).

AchievementsCairn India has had a distinguished fifteen yearsin India. During this period, it has played anactive role in developing oil and gas resourcesacross the country. Ravva, in Eastern India,was the first offshore oil and gas field to bedeveloped by Cairn.This was followed by theLakshmi gas field in the Cambay Basin off theGujarat coast in May 2000, Gauri in 2001and, its most notable find, Mangala inRajasthan in 2004 – the largest onshorediscovery in India in more than twenty years.

This field was dedicated to the nation by the Hon'ble Prime Minister of India,Dr. Manmohan Singh, on 29th August 2009.With the intent to develop the Rajasthanfields quickly, Cairn India, within two months,completed financing arrangements for US$ 1.60 billion (approximately Rs. 7200crore).The financing was arranged through acombination of US dollar and Indian rupeeborrowing by accessing both domestic andinternational markets. For thealacrity it showed in sewingup the financing arrangement,the company received the Oil& Gas Deal of the Year –2009 award for the Asia-Pacific region by ProjectFinance International, adivision of the ThomsonReuters Group.

Concurrent to these effortshas been Cairn’s evacuation of the Mangala crude fromRajasthan. From its source in Barmer, the oil ispumped through a ~590-kilometre long pipelinethat stretches across the sand dunes to Salayaunloading its contents to private refiners inGujarat and the Indian Oil Corporation.This has the distinction of being the world’slongest continuously heated and insulatedpipeline.

Always conscious of the needs of thecommunity, Cairn India developed a microvendor programme.This initiative equips smallbusinesses to manufacture and supply selectcomponents to Cairn facilities at Ravva andother corporate houses.This effort wasrecognised when it received the TERI CorporateAward for Social Responsibility in 2008.

On the business front, too, Cairn India hasbeen a powerful influence.The company was

awarded a AAA rating by the Credit Analysisand Research Limited (CARE) in March 2010for its domestic borrowing of Rs. 4000 crore(US$ 888.90 million) which is helping financethe development of world-class oil fields inRajasthan.

Cairn India’s contribution to the country’senergy security has been no less newsworthy.

It hasproduced morethan 225 millionbarrels fromRavva alone andcontributedmore than US$ 4 billion(Rs. 18,000crore) in profitpetroleum tothe Government

of India. It’s hardly surprising then that thecompany’s managing director and chiefexecutive officer, Rahul Dhir, received theprestigious Young Entrepreneur Award in theOCEANTEX World Expo 2010.

The strong foundations developed by Cairnand the goodwill it has earned has also won thecompany public support.The company’s initialpublic offering (IPO) in 2007 was the largestIPO in the Indian primary equity market at thatpoint in time.The company’s stock is listed onthe National and Bombay Stock Exchanges. Itsmarket capitalisation now stands at more thanRs. 63,000 crore (US$ 14 billion).

HistoryCairn entered India on the back of awidespread belief that greater effort needed to

Panoramic view of the Mangala processing facility at Barmer, Rajasthan

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be expended in the exploration and production(E&P) of oil.Today, Cairn is one of the largestindependent oil and gas E&P companies in India.It is headquartered in Gurgaon near Delhi andcommands material E&P interests in ten blocksin India and one in Sri Lanka.

Today, Cairn produces oil and gas from threeoperating assets – the Ravva field in AndhraPradesh, CB/OS-2 block in the Cambay Basin inGujarat and RJ-ON-90/1 block in Barmer,Rajasthan.

The significance of these discoveries,particularly after the failure of several othercompanies, can best be realised by measuringthe contribution they make to India’s quest for economic liberation.The recoverable oilreserves, for instance, in Mangala, Bhagyam andAishwariya are estimated at about one billionbarrels.This includes proven plus probable (2P)gross reserves and resources of 694 millionbarrels of oil equivalents (MMBOE) with afurther 300 MMBOE or more of enhanced oil recovery (EOR) potential.

Cairn has so far made 25 discoveries in theRajasthan block. When the company herereaches the current approved plateauproduction rate of 175,000 barrels of oil per day (BOPD) in 2011 it will account formore than 20% of India's domestic crude oilproduction.

ProductThe company produces crude oil and naturalgas – from it Ravva, Cambay and Rajasthanoperations. During the 2010 calendar year, itcumulatively produced 41.21 MMBOE of crudeoil – including condensate – and 4.91 MMBOEof gas.

In the Ravva field, Cairn has a 22.50%participating interest.This project is inpartnership with ONGC,Videocon and RavvaOil.The assets comprise a 225-acre onshoreprocessing facility at Surasaniyanam, eightoffshore unmanned platforms, 170 kilometres ofsub-sea pipelines and a single point mooring.The processing capacity of this ISO 14001certified plant is 70,000 BOPD and 95 millionstandard cubic feet per day (MMSCFD) ofnatural gas.

The Suvali terminal, operated in partnershipwith ONGC and Tata Petrodyne, is an 82-acreonshore processing facility with a capacity of10,000 BOPD of crude oil and 150 MMSCFD ofnatural gas.The Suvali terminal processes the oiland gas produced from the CB/OS-2 block.

This plant, 40% owned by Cairn India, is ISO 14001 certified and has also beengranted OSHAS 18001 certification.

The Mangala processing terminal is CairnIndia’s largest processing facility. It is spreadover 1.60 square kilometres and processescrude from the Mangala, Bhagyam andAishwariya fields. It is designed to process205,000 BOPD of crude and is expected toattain this capacity in 2011.The infrastructurethat supports this facility includes 500kilometres of pipelines and 80 kilometres of inter-field roads. Natural gas from theRajasthan fields is being used for generatingsteam which in turn will power its processingrequirements and heat the crude exportpipeline.

Recent DevelopmentsWith continuous capacity expansion, Cairn now produces about a fifth of the country’sdomestic crude oil.To transport this crude oil, itcommissioned the world's longest continuouslyheated and insulated pipeline in June 2010.Thisnational asset represents one of the first stepsin creating a world-class energy infrastructurefor India.

2010 has been a busy year for Cairn.Thecompany celebrated one year – and theproduction of 16 million barrels of oil – fromthe Mangala field in August 2010.

In another exciting new development, Cairnreceived petroleum exploration licences for twoblocks, KG-OSN-2009/3 and MB-DWN-2009/1,awarded under the eighth bidding round of theNew Exploration Licensing Policy (NELP).

The company has now embarked on a newand aggressive policy to expand its activities

beyond Indian shores. It is currently evaluatingglobal opportunities for the acquisition offoreign assets that would enhance its businessplans and vision.

PromotionTo ensure that Cairn India is ready to facefuture challenges it has evolved a curriculum toenhance the skill sets of its team even as it hasan ongoing programme to upgrade installations.

The success achieved by the company inaccelerating the production from the Mangalafield to 125,000 BOPD within a short span ofone year is one of the finest self-evidentpromotional testaments that a company can

hope for. During businessoperations, Cairn’s workers andmanagers constantly spread themessage that the company iscommitted to providing a safeworking environment to itsemployees, a business-friendlyatmosphere for its customersand is a concerned and devotedpartner to the community.

A comprehensive safety,health and environmentmanagement system is in placein all its operating units andinstallations.The company hasachieved global industry-wide

top quartile performance ranking in lost timeinjury frequency rate (LTIFR) and totalrecordable incident frequency rate (TRIFR).

Cairn also launched the Cairn IncidentManagement System in 2009 for betterreporting and investigation of incidents andnear-misses. It tracks preventative actions andsubmits all incidents, accidents and near-missesfor detailed analysis.

In collaboration with the Government ofRajasthan, the company manages the EnterpriseCentre, which imparts vocational training invarious fields to the local youth of Barmer.Cairn’s community engagement initiatives aredesigned to enrich the lives of the people in allthe regions in which it operates.

Brand ValuesThe brand stands for innovative thinking and a‘can-do’ attitude.

The four key values that drive the companyencompass a pioneering spirit that experimentswithout fear of failure and provides leadershipthat is committed to meeting challenges;teamwork that places collective goals ahead ofindividual interests and accepts other’s viewpoints and perspectives; respect for people andthe environment so that cultural differenceshave no place and the things that bind peopletogether are health, safety and security; andownership that impels people to becomeaccountable and take responsibility for deliveryon commitments.

www.cairnindia.com

Things you didn’t know aboutCairn

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Cairn pioneered deepwater exploration in India

Four of the eight significant oil and gasdiscoveries in India since 2000 have been madeby Cairn

Mangala in Rajasthan is the largest onshorehydrocarbon find in India in the last twentyyears

The Ravva field was developed from 3700BOPD to 35,000 BOPD in a record 26 months

The Lakshmi gas field went from discovery toproduction in 28 months

Horizontal wells in the Mangala field inRajasthan tested at a rate of more than 11,500BOPD – the highest-ever production rate for asingle onshore well in India

The Mangala development pipeline has enteredthe Limca Book of Records as the world’slongest continuously heated and insulatedpipeline

Cairn India secured US$ 1.60 billion(approximately Rs. 7200 crore) of fundingthrough the reserves based lending model

Welding activity on the Mangala Development Pipeline

Use of innovative methods to impart education

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