4th Mar 2015 13:32
LONDON (Alliance News) - Vedanta Resources PLC on Wednesday said its Cairn India Ltd subsidiary has cut its capital expenditure guidance for the year, tracking a wider trend within the oil and gas industry amid the fall in the world oil price.
Vedanta said Cairn India, an oil and gas explorer, has downgraded its capital expenditure guidance for the financial year to the end of March 2016 to USD500 million from USD1.2 billion previously. It will defer the remainder of the planned spending.
Cairn India said it still expects production volumes to grow in its 2016 financial year, in spite of the spending guidance cut.
The company said it will undertake projects which are economically viable at current oil prices and said its management will focus on re-engineering projects and re-negotiating contracts in order to improve current project economics.
"We would like to give confidence to our shareholders that we are more focused than ever to drive operational efficiencies in the current crude price environment. Our cash rich balance sheet and best-in-class cost profile provide a solid foundation to operate our high margin core fields. This gives us the optionality to be selective about growth projects in these challenging times," said Cairn India Chief Executive Mayank Ashar.
Vedanta shares were down 3.1% to 581.50 pence on Wednesday, one of the worst performers in the FTSE 250.
By Sam Unsted; [email protected]; @SamUAtAlliance
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