Cairn India has incurred an impairment loss of US$ 79.74 million (INR 505 crores) originating from its oil exploration activities in Sri Lanka’s Mannar basin, the company’s fourth quarter results showed.
This, coupled with falling crude prices in the global market, has led to the oil giant posting its biggest loss ever. For the fourth quarter ending in March, Cairn posted a revenue of just US$430 million, a 47 percent fall year-on-year (yoy) leading to a net loss of US$ 39 million, a nosedive from a US$ 491 million net profit yoy.
The entire financial year turned out negatively for the company, generating a revenue of US$ 2.4 billion which is a 23 percent decline yoy, leading to a 64 percent decline in net profits yoy to US$ 733 million. The oversupply of crude in the global market from the shale oil boom in North America had forced the company to retreat to its core oil fields in Rajasthan in January; laying off thousands of its exploration and development staff.
Sri Lankan government officials recently said Cairn would not go into the development stage of the gas deposits it had found in the Mannar basin.
Cairn, in response, neither admitted nor rejected the comments.
The government said it was looking for other partners to develop the gas fields discovered.
The Petroleum Resource Agreement Cairn has with the Sri Lankan government is set to expire this November.