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Cairn Energy mops up $910m.

LONDON: Britain's Cairn Energy said yesterday that it had raised $910 million from selling nearly half of its remaining stake in Cairn India and will pump the funds into developing new North Sea projects.

The Edinburgh-based explorer clinched a deal with financial services giant Citigroup to sell 153 million shares of Cairn India, netting $910 million after transaction costs, the company said in a statement. "These proceeds will be used to deliver exploration-led growth and fund the development of discovered resources in the UK and Norwegian North Sea," Cairn Energy chief executive Simon Thomson said.

The sale accounts for eight percent of the share capital of Cairn Energy's former Indian business, which transformed the company into a leading explorer after it struck oil under India's Rajasthan desert in 2004.

Cairn sold its 40-per cent controlling stake in Cairn India last December to Britain's India-focused miner Vedanta Resources led by tycoon Anil Ambani for $6.5 billion after a long battle to win Indian government approval.

After the sale to Vedanta, Cairn Energy kept a 22-per cent holding in Cairn India, which has been performing well for Vedanta.

Cairn has turned its focus to projects in the North Sea and Mediterranean, adding them to longer-running efforts to develop exploration assets off Greenland. Major commercial success has so far eluded the company. It had a string of unsuccessful drilling attempts last year off Greenland but says it remains committed to its exploration there.

"Cairn Energy is trying to rebalance its portfolio development assets so it has near-term exploration and frontier assets," energy analyst Mark Wilson at Macquarie Securities Group said.

"The only thing they don't have is existing production assets -- they only have the shareholding in Cairn. It is going to be a slower process for rebuilding the company for a second life after Cairn India."

Earlier this year Cairn bought two companies with North Sea assets seen as less risky than its holdings off Greenland, spending a total of $1.1 billion, but they need more funds to bring them up to a production level.

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Publication:Times of Oman (Muscat, Oman)
Geographic Code:0NORT
Date:Sep 26, 2012
Words:376
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