(Recasts; adds CEO's comment, details.)
By Rakesh Sharma
Of DOW JONES NEWSWIRES
NEW DELHI -(Dow Jones)- Cairn India Ltd. (532792.BY), a unit of Cairn Energy PLC (CNE.LN), Thursday posted a 60% rise in fiscal second-quarter consolidated net profit as it reversed a provision made earlier related to an arbitration with Oil and Natural Gas Corp. (500312.BY).
Net profit for the July-September quarter rose to INR4.70 billion from INR2.93 billion a year earlier, the oil and gas producer said in a statement.
The net profit far exceeded the INR1 billion average of estimates in a Dow Jones Newswires poll of four analysts.
Cairn had set aside INR1.637 billion in the April-June quarter toward some claims on the Ravva field, off India's east coast. The arbitration was awarded in Cairn's favor.
Net sales in the July-September period, however, declined 28% to INR2.30 billion due to a fall in crude-oil production and prices.
Cairn, which began production from its Mangala field in the northwestern state of Rajasthan Aug. 29, delivered its first volumes of crude oil to Mangalore Refineries and Petrochemicals Ltd. (500109.BY) Oct. 8.
The average gross output from the field has been 5,991 barrels per day during the second quarter and is currently at 10,000 bopd.
"We now look forward to ramp up production to 125,000 bopd in the first half of 2010," Chief Executive Rahul Dhir said in a statement.
Cairn, which operates the block, holds a 70% participating interest, while ONGC holds 30%. Cairn has invested $1.85 billion on developing the Rajasthan field.
In the just-ended quarter, Cairn's gross output at its operating units contracted 8% to 60,480 barrels of oil per day. Its average oil price realization fell nearly 41% to $69.1 per barrel during the same period.
-By Rakesh Sharma, Dow Jones Newswires; +91-11-4356-3334; rakesh.sharma@dowjones.com