Hit by a slump in global crude oil prices, Cairn India, the subsidiary of Vedanta Group, reported a 99% drop in its net profit to Rs 9 crore for the December quarter.
Falling oil prices also dragged its revenue down by 42% to Rs.2,039 crore in the October-December quarter compared to the same period a year ago, according to a statement released by the company on Friday.
The company had initiated various measures like renegotiating with vendor and improving operational efficiencies to cut costs in the quarter. Despite these efforts, the price for the oil produced by Cairn at its Rajasthan fields fell sharply to $34.5 a barrel against $68 a barrel in third quarter of previous fiscal year.
Global crude oil prices have more than halved in the past one year on account of excess supply.
"To ensure timely investment decision in Rajasthan block and realise fair price for our crude, we have approached the High Court to expedite the Production Sharing Contract (PSC) extension process and allow us to export the crude. The matters are subjudice," the statement said.
Mayank Ashar, Managing Director and CEO of Cairn India, said that the world's largest enhanced oil recovery (EOR) project at Mangala in Rajasthan is yielding results. The project led to 19,000 barrels per day of additional production in the quarter.
"Our unwavering commitment to improve cost efficiency continues to help us to navigate through the weak oil price situation and to generate free cash flow. We are continuously engaging with the Government to take actions to support the oil & gas industry in such a low oil price environment," Ashar said.
On merger of the company with its parent, Vedanta Ltd, the company said that "it is seeking directions of the Bombay High Court for convening meeting of all our relevant stakeholders."