When the largest oil and gas exploration and production company undertook the challenge of sustaining its growth trajectory, even at Brent $40 per barrel, it came out with the most spectacular results.
Making use of the most challenging oil price environment, Cairn India, stands on top of the list third time in a row as India’s fastest growing companies in
BW Businessworld’s charts with its sustained and strong contribution to India’s quest for energy security.
When Mayank Ashar, former CEO, stepped down in June 2016, Cairn India was sitting on a net loss figure of Rs 109.5 billion in the three months ended March 2016 along with its ongoing process of merger with parent Vedanta. Cairn India was helmed by Chairman Navin Aggarwal and its CFO, Sudhir Mathur, who took over the charge as the acting CEO and went on to pull the company out of its hammered figures.
For the October-December 2016 quarter, the company reported a 15-fold rise in net profit of Rs 604 crore, multiple times higher from the Rs 40.90 crore net profits, the previous quarter. Overall, Cairn India’s operations reduced India’s import bill by over Rs 21,000 crore and contributed more than Rs 10,000 crore to the government exchequer. The company today operates about 27 per cent of India’s crude production.
Cairn India’s flagship asset, ‘RJ-ON-90/1’, the Rajasthan block, contributes around 23 per cent of domestic crude production in India with this block alone contributing Rs 9,099 crore to the national and state exchequers in FY16. Till date, the company has made 38 discoveries in this block with hero performers or key oil fields, ‘MBA’, which stands for Mangala, Bhagyam and Aishwariya. The company has been working towards greater access of larger markets for crude oil from the Rajasthan block and made a significant development last year with commissioning of Salaya Bhogat Pipeline storage terminal and marine export facilities in Bhogat in Jamnagar, Gujarat.
Mathur explains what went in making Cairn India, the fastest growing company over the years, “We have invested substantially in bringing in new, cutting-edge technologies that boosted our production. We were the first company in India to use 4D seismic mapping for predicting hydrocarbon generation, migration and charge distribution; and petro-physical evaluation of well data.”
Over the years, Cairn India has managed to achieve tremendous improvement in productivity, which has been its strategy amid good finances, in facing the historically grey market.
With a line-up of Rs 30,000 crore in the next three years to add 1 lakh barrels per day of oil, the momentum has been kept high as the company got the much needed nod in March from the National Company Law Tribunal on the proposed merger of Vedanta and Cairn.
Mathur, who joined Cairn India in 2012, spells out how the merger holds significant importance for both the companies and the stakeholders. “This merger would de-risk Cairn India and help the company dive in access to the diversified asset portfolio of Vedanta in this highly volatile market,” he says.
The company made some serious efforts in bringing in the right mix of experts. “Recently we have roped in global oil and gas leaders like Melody Meyer and leaders like Atul Gupta who will help us to identify the right projects, drive stakeholder relationships, and expedite the execution of our existing projects,” informs Mathur. “With this, we expect our operating cost to come down in the coming days.”
BW Reporters
Naina Sood is a Economics graduate and has done her post graduation in International economics and Trade. She has deep interests in Indian economy and reforms
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