Cairn Starts Developing Bhagyam Oil Field in India’s Rajasthan

Cairn India Ltd. (CAIR), which Vedanta Resources Plc (VED) proposes to buy, has started developing the Bhagyam oil field in the western state of Rajasthan, the U.K.- based parent company said.

Production from Bhagyam is expected to start in the second half of 2011 and may reach 40,000 barrels a day by the end of the year, Cairn Energy Plc (CNE) said in a statement today. Thirty wells have been drilled in the field.

Construction of the fourth unit at the Mangala crude processing plant has started and is expected to be ready in the second half of this year, Cairn Energy said. Gross revenue from the Mangala field exceeded $3 billion, Cairn Energy said, without giving a timeframe.

Cairn India will start exploration drilling in a block in Sri Lanka in August, according to the statement.

The sale of a 40 percent stake in Cairn India by the parent is awaiting the Indian government’s approval, Cairn Energy said. The company said it agreed with Vedanta to extend the closing date of the sale and purchase agreement in order to secure the approvals to complete the transaction.

To contact the reporter on this story: Pratish Narayanan in Mumbai at pnarayanan9@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net.

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