Cairn reveals Indian gas find

Oil and gas group Cairn Energy today said it had struck gas in India.

Cairn, whose oil finds in Rajasthan in north west India lifted it into the FTSE 100 Index last year, said it had made a new gas discovery in a well at Raageshwari in the southern part of the Rajasthan basin, where it already drills for gas.

The group said the find was positive, both for establishing larger gas volumes at Raageshwari and for future exploration elsewhere in the southern part of the basin.

It said it would investigate the find further after securing the necessary approvals from the Indian authorities.

However, the news failed to spark the prolific share rises that have accompanied the company’s announcements about its oil finds in Rajasthan, with the group’s stock rising 1% or 18p to 1066p in morning trading.

A spokesman said the company’s decision to carry out further investigations showed it believed there was enough gas in the well to justify further exploration.

But he added: “It’s still too early to say what the extent of it is.”

Chief executive Bill Gammell described the group’s initial evaluation of the discovery as encouraging.

“Further evaluation and appraisal work will be required before understanding its full significance,” he said.

Cairn also said it had won permission from the Indian government to look for oil and gas in a 856 square kilometre (531 sq mile) extension of its existing exploration area in Rajasthan.

Cairn’s share price soared last year after the group said it had made a string of oil discoveries at a site in Rajasthan that it bought from Shell a couple of years ago.

However, the shares fell sharply last month after Cairn said an appraisal of a potential extension to its development site in Rajasthan had been disappointing.

Mr Gammell set up the company in the 1980s and has successfully switched its focus to South Asia from interests in the US and Europe.

It operates in Bangladesh and Nepal as well as India.