29 September 2009

Cairn Energy to Have Two Offshore Rigs for Drilling in India and Sri Lanka

29th September 2009, www.bloomberg.com, By Rakteem Katakey

Cairn Energy Plc, the U.K.-listed explorer focused on India, wants to hire two offshore drilling rigs as it seeks new oil and gas deposits in South Asia.

The explorer called for bids for one rig each in India and Sri Lanka, according to an advertisement in the New Delhi edition of the Economic Times newspaper today. Cairn plans to drill in Sri Lanka by January 2011 and off India’s east coast by October 2010.

Cairn started output from its biggest field in India last month. The number of rigs used by oil and gas explorers in Asia fell 9 percent in August as the global recession sapped demand for energy and reduced credit, according to data from Baker Hughes Inc.

The explorer wants to hire a drillship or a semi- submersible rig in Sri Lanka. A drillship currently costs about $250,000 a day and a semi-submersible rig about $280,000, according to rigzone.com.

Cairn plans to drill three wells with an option to drill two more in a deepwater block in the Gulf of Mannar in Sri Lanka, according to the advertisement. It plans to drill three wells with an option on an additional three in a shallow-water area off the coast of Tamil Nadu and Andhra Pradesh states in partnership with Oil & Natural Gas Corp. and Tata Petrodyne Ltd.

Sri Lanka awarded its first exploration rights for an offshore block to Cairn India Ltd. last year after evaluating proposals for one of three blocks offered through competitive bidding.

To contact the reporter on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net.

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