The new wells will allow Cairn, headed by ex-Scotland rugby international Bill Gammell, to "significantly" increase the level of gas it supplies to the nations market. But the news failed to stop the companys shares being marked down 1.3 per cent - 16 pence - to 1200p by midday. Sangu, which is situated in the Bay of Bengal about 25 miles south-east of the port city of Chittagong, is Bangladeshs sole offshore gas field. Cairn operates the field under a production-sharing contract. Cairn general manager Ian Halstead said: "These new wells will significantly increase the availability of gas for delivery into the southern gas market. Now we can produce up to 170 million cubic feet [mmcf] of gas per day and we are supplying 150 mmcf of gas per day to the national grid." And Mr Halstead - who said around £26 million had been invested in the second phase of Sangus development - added that by the end of April total production capacity would be 200 mmcf per day. News of the increase in gas supply followed last months announcement that Cairns test drillings for oil in Indias Rajasthan region had proved successful. The Sangu gas field, which has six producing wells, was discovered in February 1996, with the first gas being delivered onshore in June 1998. Sangu provides roughly 12 per cent of the total gas supply to Bangladesh, and has 15.33 trillion cubic feet of proven and recoverable gas reserves based on current estimates, according to energy officials. Meanwhile, US light crude prices slid 71 cents to $53.40 a barrel, more than eight per cent below Mondays record $58.28, while Brent crude was down 99 cents at $53.05. Todays falls extended a week-long stretch of losses fuelled by rising crude stockpiles in the United States. Andy Xie, an economist at Morgan Stanley, said recent comments from US Federal Reserve chairman Alan Greenspan had a hand in pushing crude prices down from highs of near $58. "The most important thing is that a policy-maker is publicly talking about the prices," he said. "This will have a serious impact on the oil market." Mr Greenspan had said on Tuesday that rising oil inventories may "damp the current price frenzy". Mr Xie said, however, that he is unsure that the recent falls in crude futures mark the end of the oil price rally. But other analysts were less sure. Ed Silliere, analyst with Energy Merchant Intermarket Futures, said: "This is it. This is the dam break. Id have to say the bull market is done." PIN//Scotsman