CapitalMarket.com - Cairn India gains after amicable end to pipeline tiff
Hot Pursuit Monday, January 15, 2007 11:27 Hrs IST

Print this page


Cairn India gains after amicable end to pipeline tiff

Cairn India jumped 5% to Rs 142, amid reports of reaching an agreement with ONGC to build a $340-million pipeline to transport crude oil from Rajasthan to Gujarat.

The stock rose on high early volume of 26 lakh shares on BSE.

ONGC and Cairn will share the cost of the pipeline project in 70:30 ratio. The new arrangement will also mark Cairn Indiaís involvement in the mid-stream segment of the petroleum business in the country.

One of the major reasons for the weak performance of Cairn India on debut was the concern about a possible delay in production of crude from its Rajasthan field scheduled in 2009. Cairn had warned investors that its dispute with ONGC, its partner in the Rajasthan blocks, over funding of the pipeline may delay production, scheduled to begin from 2009. The stock had settled at Rs 137.50 on 9 January 2007 (the day of its debut), compared to the IPO price of Rs 160. The stock moved around Rs 134 - Rs 135 level over the next three days, from 10 January to 12 January.

As per reports, Cairn and ONGC will first build a 340-km line to Indian Oil Corpís (IOC) Viramgam pipeline terminal in Gujarat. Viramgam is connected by pipelines to IOCís Koyali, Panipat and Mathura refineries, potential customers for Rajasthan crude. A smaller pipeline can be built along the coast or at Jamnagar, where Reliance Industries and Essar Oil also have their refineries. The construction will take 12-18 months.

Cairn India intends to utilize a major portion of the IPO proceeds to develop the Rajasthan block and for additional drilling in Ravva (Andhra Pradesh) and Cambay (Gujarat) blocks.

Previous Stories
More 4
Other Stories
4  Sun Pharmaceutical Industries leads gainers in 'A' group (20-Aug 16:07 Hrs IST)
4  Ramco Systems hit 52-week high (20-Aug 15:16 Hrs IST)
4  OBC, Dena Bank slide on reports of misappropriation of funds (20-Aug 14:51 Hrs IST)
4  Venus Remedies jumps on Swiss nod for anti-cancer drug (20-Aug 14:49 Hrs IST)
4  Suzlon Energy drops on profit booking (20-Aug 14:15 Hrs IST)
4  Lumax Industries jumps over 29% in four sessions (20-Aug 14:08 Hrs IST)
4  Volumes jump at FDC Counter (20-Aug 13:43 Hrs IST)
4  Indiabulls Real Estate corrects on profit booking (20-Aug 13:20 Hrs IST)
4  Select stocks drop ex-dividend (20-Aug 13:07 Hrs IST)
4  Cadila Healthcare jumps after USFDA OK for anti-viral drug (20-Aug 12:49 Hrs IST)
Next4