CAIRN INDIA - AceAnalyser Meet/132792_20100802.pdf · These materials contain forward-looking...
Transcript of CAIRN INDIA - AceAnalyser Meet/132792_20100802.pdf · These materials contain forward-looking...
CAIRN INDIA
Corporate Presentation
August 2010
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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
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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%
Corporate Presentation August 2010
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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%
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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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
Corporate Presentation August 2010
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Additional Information
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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
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~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
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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
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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
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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