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Shell’s great lucky break was that its annus horribilis

The Times: COMMENT: Well, well, well: “Shell has made six “significant finds” since the start of last year and they might have been involved in more had it not, famously, sold for a pittance its stake in the fruitful Mangala field in India to Cairn.”: “…Shell’s great lucky break was that its annus horribilis has coincided with the strongest oil market for more than 20 years.

Posted 24 September 2004

Favoured by a lucky break, Shell has prioritised discovering new reserves. As well it might. By Mike Verdin

The world of the oil giants is a real zoo. Just look at Shell, which has suffered a beastly few months.

First the company dropped a mammoth clanger. Then it ditched its top dog. Now the oil giant has put out an order for big cats.

Since January, Shell has ditched 20 per cent of proven stocks, and axed its chairman, Philip Watts. Now the big cats hold the solution to the company’s reserves problems. read more

Shell spends big to recoup ‘lost’ oil

The Age (Australia): Shell spends big to recoup ‘lost’ oil

“Managing director of exploration and production Malcolm Brinded admitted that Shell’s reserve replacement rate would only be 100 per cent over the next five years – less if the “lost” barrels were excluded.”

By Christopher Hope

London

September 24, 2004

Shell has pledged to spend more cash on finding oil and gas over the next three years as the world’s No.3 oil company admitted that its production was likely to be flat until 2009.

Shell also said it would sell $US10 billion to $US12 billion ($A14-$A17 billion) of non-core assets as part of an “urgent need” to restore its position after “losing” 4.4 billion barrels of proven oil and gas this year.

Unveiling Shell’s strategy for the next three years, Jeroen van der Veer, chairman of the committee of managing directors, admitted that production “is expected to grow to between 3.8 million and 4 million barrels per day by 2009”, well behind where rival BP is likely to be. Shell’s output last year was 3.9 million barrels a day. read more

We’ll be running to stand still until 2009, says Shell

Daily Telegraph: We’ll be running to stand still until 2009, says Shell

“…Mr Van der Veer was dismissive of suggestions it might merge with French giant Total. He said: “The fact that [that story] can get legs shows that our reputation is not where we want it to be.”: “Shell was embarrassed about selling a field in North India to oil minnow Cairn Energy for a few million dollars which later yielded hundreds of millions of barrels of oil, he said.”

By Christopher Hope, Business Correspondent (Filed: 23/09/2004)

Shell pledged yesterday to spend more cash on finding oil and gas over the next three years as the world’s third largest oil company admitted that its production was likely to be flat between now and 2009.

Shell also said it would sell off $10 billion to $12 billion of non-core assets as part of an “urgent need” to restore its position after “losing” 4.4 billion barrels of proven oil and gas earlier this year. read more

Shell weighs multi-billion share buyback to win over investors

Independent On Sunday: Shell weighs multi-billion share buyback to win over investors

“Shell, the tarnished oil giant…”

By Tim Webb

19 September 2004

Shell, the tarnished oil giant, is considering buying back billions of pounds’ worth of its shares in a bid to restore investor confidence.

The news comes as new chairman Jeroen van der Veer prepares to convince the City this week that he can turn the company around as he unveils his delayed annual strategy presentation.

The Dutchman will announce a wide-ranging review of Shell’s oil exploration and production business in a bid to reverse lagging output and reserves figures. read more

Eyes on Shell again as new boss tries to fight back

Scotland On Sunday: Eyes on Shell again as new boss tries to fight back

“…Cairn Energy – the Edinburgh firm which looks set to rake in bucketloads of cash from Indian assets it bought for a song from Shell – officially begins trading on the FTSE100 tomorrow.”

IAIN DEY

19 Sept 04

SHELL is set to find itself the centre of the market’s attention yet again this week as it unveils the findings of its strategic review.

The oil giant’s new chairman, Jeroen van der Veer, and his head of exploration, Malcolm Brinded, will try to draw a line under the reserves reporting scandal which hammered its shares earlier in the year.

But investors are expected to have to wait until November to hear details of any changes to its baroque corporate structure – which remains the biggest issue for the City. read more

Buccaneer who struck black gold

The Business: Buccaneer who struck black gold

“Two years ago, Cairn bought out Shell completely for £4m and kept drilling.”: “Cairn kept going where the mighty Shell gave up”: “Cairn has a market capitalisation of £2bn, compared with £6m when Gammell founded the company in 1980.”

12 Sept 04

The former Scottish rugby star who founded Cairn Energy is now in the scrum with oil giants

NOW here’s a question. Which British businessman is a close friend of Tony Blair and President Bush? Here’s a clue. Blair opened his company’s new head office in Edinburgh, and Bush, as a young boy, used to holiday on the family’s Scottish farm. Time’s up.

It’s Bill Gammell, founder and chairman of Cairn Energy, the new hotshot of the oil industry. It is said that when the oil markets descend into crisis – as they have recently- Blair and Bush ring Gammell’s office, with its glorious views of Edinburgh Castle, where labouring inside is the tall, thin figure of Gammell, a former Scotland rugby international. read more

Lumbering, floundering Shell

ThisIsMoney.com: Special report: King at Cairn: It’s the tale of David and Goliath, the fleet-footed, smart Cairn against the lumbering, floundering Shell…”: “…he has to say only one word to his critics who want him to play this more cautious, stay-at-home, game. The word is Shell.”

Chris Blackhurst, City Editor, Evening Standard

Posted 10 September 2004

HERE’S a point in the life of any stock market star when they leave the City and enter the pub or golf club bar. It’s when they cease to be a hot topic for a select few in the Square Mile and start to attract wider interest.

These things have a momentum of their own. One or two savvy specialists get in there first, the company continues to prosper, the shares climb, the institutions* take an interest, the price lifts, the wider City audience clambers aboard, the stock keeps on going, then anyone with money to invest decides to have a dabble. read more

The Independent: Cairn caps FTSE 100 entry with oil find

The Independent: Cairn caps FTSE 100 entry with oil find

“Mr Gammell refused to comment on Shell’s decision to sell the exploration block to Cairn for a pittance,…”

By Michael Harrison, Business Editor

08 September 2004

Cairn Energy, the independent oil exploration group, yesterday celebrated its entry into the FTSE 100 index of leading companies by reporting its fifth oil discovery this year in the north-west Indian region of Rajasthan and announcing that the field could contain up to 1.2 billion barrels of recoverable reserves.

The upbeat news was not enough to prevent Cairn shares slipping slightly as investors expressed mild disappointment that the company had not announced another blockbuster find. However, despite the 2.5 per cent dip in its price, Cairn still eased its way into the blue-chip index with a market valuation of £2.28bn, displacing Bradford & Bingley. read more

Scotsman.com: Cairn Energy Powers into FTSE 100

Scotsman.com: Cairn Energy Powers into FTSE 100

“Cairn has seen its shares more than triple since January when it announced the first of 10 finds in India on an oil field purchased from Shell for £4 million in 2002. The company is now valued at more than £2 billion.”

By David Winning, City Staff, PA News

The meteoric rise of oil and gas group Cairn Energy continued today as its place among the UK’s top 100 firms was confirmed.

The Edinburgh-based group joins larger rivals Shell and BP in the FTSE 100 Index at the expense of banking group Bradford & Bingley following a review of membership of the Footsie.

Cairn has seen its shares more than triple since January when it announced the first of 10 finds in India on an oil field purchased from Shell for £4 million in 2002. The company is now valued at more than £2 billion. read more

The Times: Cairn waits for green light on Mangala

The Times: Cairn waits for green light on Mangala

“Approval by the Government would enable Cairn to start developing Mangala to extract up to 100,000 barrels of oil a day from the Rajasthan desert bloc it bought off Shell two years ago.”

By Peter Klinger

September 08, 2004

CAIRN ENERGY, the Edinburgh oil and gas company, said yesterday that it was confident India’s Government would give the go-ahead to turn its Mangala discovery into a significant oil-producing asset before the end of the year.

Approval by the Government would enable Cairn to start developing Mangala to extract up to 100,000 barrels of oil a day from the Rajasthan desert bloc it bought off Shell two years ago.

Cairn has estimated that the development cost of the Mangala discovery would be about $500 million (£280 million). read more

Modest Scot who has hit the jackpot

Daily Telegraph: Modest Scot who has hit the jackpot

“Seven years ago he invested in an overlooked Rajasthan field, buying the last 50pc from Shell for $7.5m in 2002. By last December, Cairn had spent $100m on drilling. Then in January, it struck black gold.”

(Filed: 08/09/2004)

It’s been a year to remember for Bill Gammell, chief executive of Cairn Energy, who has seen the company he founded 24 years ago in Edinburgh quadruple in value in the 12 months to £2.3 billion.

The 51-year-old started Cairn Energy Management with a friend in 1980 and floated the renamed firm in 1989. Seven years ago he invested in an overlooked Rajasthan field, buying the last 50pc from Shell for $7.5m in 2002. By last December, Cairn had spent $100m on drilling. Then in January, it struck black gold. read more

The Guardian: Rajasthan oil takes Cairn into FTSE 100

The Guardian: Rajasthan oil takes Cairn into FTSE 100

“Cairn was also able to announce another drilling success in Rajasthan, with a fifth oil discovery near Mangala, which it bought for a song from Shell.”

Doubts remain over field’s potential output

Terry Macalister

Wednesday September 8, 2004

Cairn Energy, the Edinburgh oil and gas group, yesterday became one of Britain’s top 100 companies, despite announcing a 40% slump in half-year profits and facing questions over its key oil discovery in India.

Shares in the company have soared since January when it found the massive Mangala field in Rajasthan. It took its place in the FTSE 100 yesterday at the expense of the building society, Bradford & Bingley. read more

The Guardian: Notebook: Time to grow up

The Guardian: Notebook: Time to grow up

This is the firm that snatched an exploration licence for the Indian state of Rajasthan from Shell for the comical price of £10m – just before Shell owned up to its serial over-statement of its reserves. Cairn proceeded to make a string of discoveries…”

8 Sept 04

In these days of heady oil prices, it was strange to see an oil company reporting a 40% slump in half-time profits yesterday. But then Cairn Energy is not a normal company – or at least Cairn has enjoyed a rather abnormal year.

This is the firm that snatched an exploration licence for the Indian state of Rajasthan from Shell for the comical price of £10m – just before Shell owned up to its serial over-statement of its reserves. Cairn proceeded to make a string of discoveries in Rajasthan and seems to have identified up to 400m barrels of recoverable crude in a field that may contain 2bn barrels. read more

The Independent: Market Report: Cairn Energy

The Independent: Market Report

“Cairn bought control of an oilfield in Rajasthan, India, from Shell in 2002. The amazing success of this asset forms the basis of Cairn’s £2.4bn market capitalisation. The group paid Shell just £4m for control of the field.”

Michael Jivkov

07 September 2004

A half-hearted performance by Schroders yesterday means that shares in the fund management giant are likely to exit the FTSE 100 in tomorrow’s reshuffle of the blue chip index. Schroders managed a rise of just 7.5p to 648p, valuing the group at £1.8bn, and it is now virtually certain of being relegated in the latest quarterly review by FTSE of its indices.

In its place will come Cairn Energy, steady at 1,474p, as the oil explorer makes its debut in the top flight after a near-fourfold rise in the company’s stock this year. It will take its place alongside rival Shell, which it partly has to thank for the success. Cairn bought control of an oilfield in Rajasthan, India, from Shell in 2002. The amazing success of this asset forms the basis of Cairn’s £2.4bn market capitalisation. The group paid Shell just £4m for control of the field. read more

Discoveries push £2.4bn Cairn into FTSE 100

The Times: Discoveries push £2.4bn Cairn into FTSE 100

“…it will also seal the humiliation of an already shamed Shell”

By Nick Hasell

September 06, 2004

CAIRN Energy is set to secure a place in the FTSE 100 for the first time in this week’s quarterly index reshuffle after four significant oil discoveries in India this year triggered a near-fourfold rise in its shares.

Elevation to the benchmark index will mark a triumph for Bill Gammell, chief executive of the Scottish oil and gas explorer, who boasts a close friendship with US President George Bush and a school acquaintance with Tony Blair. But it will also seal the humiliation of an already shamed Shell, which originally owned 50 per cent of the strike-rich property in Rajasthan that is the basis of Cairn’s current £2.4 billion stock market valuation. read more

Cairn’s Indian oil find comes in at the top end of City forecasts

Sunday Telegraph: Cairn’s Indian oil find comes in at the top end of City forecasts

“Investors have become concerned about reserves bookings in the wake of the debacle at Royal Dutch/Shell. The Anglo-Dutch oil giant shocked the market in January by revealing it had overbooked its reserves by 25 per cent.”

By Sylvia Pfeifer (Filed: 05/09/2004)

Cairn Energy will this week delight the City by revealing that reserves at its giant oil field in India are at the top end of forecasts.

An external audit report is understood to have concluded that the giant “Mangala” field in Rajasthan, northern India, holds close to 1.1bn barrels of oil.

The report says the field is likely to yield close to 275m barrels of oil – at the upper end of the previously estimated range of “recoverable” reserves of 100m to 275m barrels. read more

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