CAIRN INDIA - AceAnalyser Meet/132792_20100802.pdf · These materials contain forward-looking statements regarding Cairn India, our corporate plans, future financial. condition, future

CAIRN INDIA

Corporate Presentation

August 2010

2

Disclaimer

These materials contain forward-looking statements regarding Cairn India, our corporate plans, future financialcondi t ion, future resul ts of operat ions, future business plans and strategies. Al l such forward- lookingstatements are based on our management's assumptions and beliefs in the light of information available tothem at this time. These forward-looking statements are, by their nature, subject to significant risks anduncertaint ies and actual results, performance and achievements may be material ly dif ferent from thoseexpressed in such statements. Factors that may cause actual results, performance or achievements to differfrom 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 useof technology, acts of competitors and other changes to business conditions. Cairn India undertakes noobligation to revise any such forward-looking statements to reflect any changes in Cairn India’s expectationswith regard thereto or any change in circumstances or events after the date hereof.

Corporate Presentation August 2010

3

Holding Structure

IPO December 2006

Listed on BSE & NSE in January 2007

Part of NIFTY index, MSCI & DJIT30

Over 200,000 Indian retail shareholders

Market Capitalisation >USD 13bn

Amongst India’s top 20 companies by market cap

DJIT30: Dow Jones India Titans 30 Index As on 30th June 2010

Promoter62.37%

Petronas14.94%


4

Existing Operations

Cambay (CB/OS-2)

Cairn (Operator) 40%

ONGC 50%

Tata Petrodyne 10%

Ravva

Cairn (Operator) 22.5%

ONGC 40%

Videocon 25%

Ravva Oil 12.5%

Total 11 blocks

2 Production Blocks Gross operated production

94,950 boepd (net to Cairn 44,381 boepd)*(Ravva, Cambay & RJ)

1 Production & Development Block

Rajasthan block under development – Mangala (commenced production in Aug’09), Bhagyam and Aishwariya fields(MBA)

22 other discoveries

8 Exploration Blocks 5 operated – 4 in India and

1 in Sri Lanka 3 non-operated

*Q1 FY 20010-11

Rajasthan (RJ-ON-90/1)

Cairn (Operator) 70%

ONGC 30%


5

Strategy For Sustained Growth

Maximise recovery from

production base

Execute Rajasthan

development

MaximisePotential in Rajasthan

Identifynew growth

opportunities

Increased Ravvareserves by 20%

>15 years of low cost operations in Ravva

Completed 4D seismic campaign in Ravva to identify bypassed oil zones

Increased oil production from CB/OS-2

Commenced Production & Pipeline Sales

Mangala peak production at 125 kbopd; potential to 150 kbopd*

MBA approved peak production at 175 kbopd

Increased recovery through EOR; pilot ongoing

>3,000 km2 in BarmerBasin under contract

Growing resource base; increased from 4 to 6.5 bn boe

Monetise Barmer Hill & Other Fields

Vision to produce 240 kbopd**

New leads in existing portfolio

Ongoing exploration in Rajasthan

3D Seismic analysis ongoing in Sri Lanka & Palar; Drilling in 2011

Existing portfolio enhancement; awarded 2 blocks in NELP VIII

* subject to GoI approval & additional Sales arrangements, ** subject to GoI approval & additional investments


6

Rajasthan - Frontier to Producing Basin

Development & ProductionExploration & Appraisal

ViramgamGujarat

Rajasthan

Koyali

Tankers toCoastal Refineries

Jamnagar / Salaya

Kandla

Bhogat

AishwariyaBhagyam

Mangala

OilGas

Raageshwari

Mangala Processing

Terminal

Frontier Exp.1995 - 2002

25 discoveries to date>3,000 km² approved development area


7

FY 2010 By FY 2012

WI

24,939bopd

>130,000bopd

Production from Mangala Field started on 29 August 2009; Pipeline sales started in June 2010

Production by FY 2012: Includes GoI approved MBA peak production of 175,000 bopd

Vision to produce from Rajasthan block – 240,000 bopd

Increase in production

Gross: >200%Working Interest: >400%

69,059 bopdGross

>200,000 bopdGross

Transformational Growth


8

Rajasthan – Development Status

Mangala production started from Train 1 in August 2009

Trains 2 & 3 operational, processesing >100,000 bopd

Pipeline sales commenced; delivered to refiners

Delivered >7 mmbbls to PSU & private refiners

Mangala ramp up to 125,000 bopd in H2 2010

4 rigs operating, 81 Mangala wells drilled; 65 completed

Successfully completed 9 Mangala Horizontal wells; tested at an average production rate of >11,500 bopd

Wells confirm excellent reservoir quality and deliverability; indicates Mangala production potential of 150,000 bopd subject to GoI approval

Train 4, Salaya – Bhogat pipeline section targeted in 2011

Total Pipe Diameter 790 mm (32”)

Poly Urethane Foam Insulation

Heat Tube

High Density Polyethylene Wrap

MPT

Pipeline

Data as per 27 July 2010 press release


9

Rajasthan - 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

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 June 2010

Further infrastructure to Bhogat, Gujarat coast, scheduled end 2011

• Access to 75% of India’s refining capacity

Viramgam

KoyaliJamnagar

/ Salaya

Kandla

Mangala

~590 km heated pipelinefrom Barmer to Salaya

complete; sales commenced

Radhanpur

Bhogat

Refinery

Existing Pipelines

Pipeline Route

Tankers to Coastal Refineries


10

Mangala 2010 Production – Key Enablers

• Development drilling and Reservoir performance confirms deliverability

Technical and Operational

• JV Approvals• Additional SalesRegulatory

• Facilities upgradeand de-bottleneckingInvestment

Target

150,000 bopd

FDP Approved

143,000 bopdCurrent Sales Arrangement125,000 bopd


11

Rajasthan - Future Resource And Value Potential

mmbblsmmbbls

Gross InitialIn Place Volumes

20 additionaldiscovered

fields including Barmer Hill

MBA Fields,Raageshwariand SaraswatiFDP approved

2.1 Billion boe

~4 Billion boe

~6.5 Billion boe

ContingentIn Place

MBASTOIIP

R & S STOIIP

In Place

Prospective

Most Likely

1,293

M

468

B

293

A

78

R & S

GasGIIP

OilSTOIIP

ContingentResource

R & S 12

M477

B151

A 66

707

2P+2C

MBA EOR

308

MBA EOR

140

BH+ Others

Barmer Hill+Other Fields

Risked ProspectiveResource

250

RiskedProspects,

Leads & Concepts

~2.5 Billion boe in35+ prospects

Gross Reserves, Resources 1 and Potential2

1 The independent estimates of Reserves and Contingent Resources recently carried out by D&M are in line with the CIL estimates

2 Top 35 prospects audited by D&M risked resource 178 mmbbls


12

2P+2C

Rajasthan - Vision to Produce 240,000 bopd

MBA EOR BH+Others Risked Prospective Resource

Approved MBA:175**+ M: 25*+ A: 10*

Additional Production*

Vis

ion

to p

rodu

ce

240,

000

bopd

*

308

707

140

250

Gro

ss In

itial

In P

lace

Vol

umes

(~

6.5

billi

on b

oe)

Gross Reserves, Resources & Potential (~1.4 billion boe)

2.1

bnbo

e1.

9 bn

boe

2.5

bnbo

e

*Subject to Government approval** M: 125kbopd, B: 40kbopd, A: 10kbopd


13

Rajasthan - Vision For Growth

FDP ApprovedProduction

175,000bopd

FDP Approved Production Capacity

205,000 bopd

Target

PotentialProduction

240,000 bopd

MBA

MangalaProcessing Terminal

• Reservoir Performance• EOR Pilot Implementation• BH Pilots and Development• Exploration and Appraisal

Technical and Operational

• JV Approvals• Additional SalesRegulatory

• Facilities and pipeline• EOR full field implementation• BH staged development• Exploration

Investment


14

Exploration Programme

RAVVA

Appraisal & exploration plans

KG-DWN-98/2

3 appraisal well 2010

KG-ONN-2003/1

Up to 5 exploration wells 2010

PR-OSN-2004/1

3D 800 km2, completed in Q1

2010; Drilling in 2011-3 wells

RJ-ON-90/1

2 exploration wells drilled, assess new plays, generate new

prospects

SL-2007-01-001

3D seismic ~ 1750 sq km completed;

Drilling in 2011 – 3 wells

SRI LANKA

KK-DWN-2004/1

300 km2 3D planned in 2010

GS-OSN-2003/1

1 well plugged & abandoned

NON-OPERATED

OPERATED


15

Cash Flow from Operations

22 16

5976

108

128

8

9

6

613

15

10

24

17 24

46

50

67

Q1 Q2 Q3 Q4 Q1

Cash flow from operations Other Income Tax Cash Costs

205

FY 2009-10 FY 2010 -11

Q3FY10 onwards Mangala sales are includedCFFO = PAT + Exploration + Deferred Tax + Other Non cash – Other Income – MAT Credit – FX Gains – Exceptional ItemsOther Income = Income from InvestmentsTax = Current Tax + FBT on ESOP.Cash cost = Production cost + G&A + Interest paidConversion Rate: Q1’FY10:48.71, Q2FY10:48.43; Q3’FY10: 46.60; Q4’FY10: 45.90; Q1FY11: 45.68

USD million

57 61

128

145


16

Rajasthan - Funding

Capex Gross Net

Exploration (till 2006)* 0.61 0.57

DevelopmentCY 2007 0.31 0.22

CY 2008 & 2009 1.76 1.23

CY2010 & 2011 (Est) ~2.00 ~ 1.40

Financed By

Net Cash/(Net Debt) (0.1)(31st Dec’09)

Existing debt facility 1.60

Total 1.50

Additional Sources

Cash flow from producing blocks

*Exploration Cost: During the initial years the entire exploration costs was borne by Cairn India and hence the net number is > 70%.

USD billion


17

Engaging 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

EconomicDevelopment


18

Summary

Rajasthan

• Started production – Mangala field dedicated to the Nation

• Delivered to PSU & Private refiners

• Pipeline sales commenced; allows access to multiple buyers

• Increased delivery, consistent cash flow

• Enhanced oil recovery potential; pilot started

• 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

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


19

Additional Information

20

Aishwariya

Bhagyam

Intra-fieldPipelines

and Crossings

Mangala

Rajasthan - Integrated Evacuation Facilities

Raageshwari Gas Terminal (RGT) and Well Pads

Saline water for MPT and secondary recovery from reservoir

Thumbli water field facilities

Water System

Raageshwari Gas piped to MPT Combined with Mangala associated

gas for power generation

MPT and Well Pads

Train1 (30 kbopd), Train 2&3 (50 kbopd each): Producing

Train 4 (75 kbopd) : 2011 Fluid handling capacity 1 mmbfpd >350 wells, >40 well pads

~670 km pipeline to Gujarat coastSkin Effect Heat Management Systems (SEHMS)Multiple oil delivery points

Export oil pipeline plus heating stations

Infrastructure

~500 km of intra and inter field pipelines

~80 km of inter field roads Built-in fire and safety systems

21

~130 km

Total Acreage3,111 km2

Rajasthan Block - Exploration

Portfolio Growth

• Risked portfolio grown from ~35 to ~250mmboe, with significant

upside potential

• Oil (75%): Gas (25%)

Detailed Block Re-evaluation

• Major update on understanding of petroleum systems

• Generated broad range of prospects (near field to new plays)

• Drilling options to de-risk major new plays

• Assessing unconventional potential

Future Plans to realise value

• Acquisition of new 3D seismic programmes to calibrate existing

prospects and define new ones

• Drilling programme to add new resources and test new play concepts

• Continue new studies

22

Chemical EOR – Polymer and ASP

Increased reserves• Better sweep efficiency• Better displacement efficiency

Plateau extension / enhancement• Mobilize more oil• Increase in production rate

Reduced costs• Reduced water handling• Reduced energy requirement

EOR potential from MBA fields ~300 mmbbls

10 well pilot programme on Mangala field underway scheduled for completion 2011

Field wide phased implementation 2013 onwards

Rajasthan Resources - EOR

EORPotential to extend and enhance plateau

MBA Water flood

Oil

Rat

e

175,000bopd

10 Years

Initial targeted plateau production

Q3 2009

Schematic

23

Rajasthan Resources - Barmer Hill

Barmer Hill and other fields STOIIP- ~1.9 billion boe

• Barmer Hill analogous fields recovery factors - 7 to 20%

• Gross recoverable resource estimated at 140 mmboe

Discovery wells tested in Mangala and Aishwariyaat 30-250 bopd

Low permeability reservoir

• Fracture technology and micro seismic applicationdemonstrated in Raageshwari

• Successful coring programme in Mangala

• Initial Mangala pilot planned in 2010

• Declaration of Commerciality submitted

Future Plan

• FDP in preparation

• Staged development

• Blockwide exploration

24

Exploration - Sri Lanka Block (SL 2007-01-001)

India

SRI LANKA

50km

SL 2007 01 001

Contract effective 18th October 2008

Cairn Lanka 100% Working Interest (NOC back-in 15%)

• Block Area: ~3000 km2

• Water depth: 400-1900m

Extension of proven hydrocarbon play (Cauvery / Mannar)

Under explored, frontier basin with multiple plays

Exploration Program

• 3D Seismic survey completed (~20% more than MWP of 1,450 km2); analysis ongoing

• Drilling in Q2 CY 2011

MWP: Minimum Work Program

Documents

CAIRN INDIA - AceAnalyser Meet/132792_20100802.pdf · These materials contain forward-looking statements regarding Cairn India, our corporate plans, future financial. condition, future