Cairn India quarterly profits increase nearly 9-fold

Britain's Cairn Energy India unit announced on Tuesday that net profit increased by nearly nine-fold to $610 million, thanks to a rise in crude oil prices and an increase in production. The results come as Cairn Energy aims to sell a controlling stake in its Indian arm to British mining giant Vedanta Resources in a multi-billion-dollar deal. The oil exploration firm said net profit in the three months to June quarter leapt 869 percent to 27.27 billion rupees ($610 million) from a year earlier. Rahul Dhir, chief executive officer of Cairn India, said in a statement that the company's Rajasthan fields in northwest India "have significant growth potential." Consolidated sales leapt to 37.13 billion rupees from 8.41 billion rupees in the same period a year ago. The earnings were broadly in line with market forecasts and reflect the jump in global crude prices. The sale of Cairn Energy to Vedanta, one of the biggest in Indian corporate history, was originally valued at $9.6 billion. But Cairn and Vedanta agreed later to cut the price by more than $600 million. Cairn had agreed to sell a 40 percent stake in Cairn India to Vedanta a year ago, but the deal became bogged down in a dispute over royalties. The Indian government has approved the stake sale on condition that Cairn India agrees to pay part of the royalty costs on crude production from the Rajasthan fields and stop its fight against a government tax on crude sales. Cairn India plans to poll shareholders on whether to accept the government's conditions which it says would reduce the company's earnings