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Daily Telegraph: Cairn climbs as India eyes oilfields

Mar 4th, 2006
by admin.

By Katherine Griffiths (Filed: 04/03/2006)
The possibility that Cairn Energy, Europe's largest independent oil company, might be swallowed by a larger rival has again been raised after India's state-run energy company said it was interested in buying Cairn's prized assets in the country.
Shares in the Edinburgh-based company rose 30p to £19.97 yesterday after Subir Raha, chairman of India's Oil and Natural Gas Corporation (ONGC), said a bid for Cairn's oilfields in the country was “one of the opportunities we are looking at”.
Cairn's Indian assets have been valued by analysts at about £2bn. They include extensive oilfields in the desert of Rajasthan which, when Cairn discovered them in 2004, marked the largest finds in India for 22 years.
The discovery also transformed Cairn, founded by chief executive Sir Bill Gammell, pushing the shares up 400pc since January 2004 and making it the largest oil and gas company below national majors such as Shell and BP.
Cairn also operates in Bangladesh and Nepal. The Rajasthan fields are still in the exploration phase. If they meet expectations, they should more than double Cairn's daily delivery to 250,000 barrels.
ONGC is Cairn's exploration partner in India. If it tabled a bid it would be buying Cairn's largest and fastest growing part of the business.
Cairn, which reports full-year results on March 14, would not comment on the possibility of a closer tie-up with ONGC.

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