Cairn India has ‘not yet’ given the information sought by the upstream regulator, Directorate General of Hydrocarbons (DGH), which would facilitate the extension of contract for the onshore Barmer block by 10 years beyond 2020, said a senior official in the petroleum ministry.
On December 15, the Delhi High Court had given the government six months to take a decision on extending Cairn’s production sharing contract (PSC) for the Barmer oil fields in Rajasthan. The private explorer approached the court seeking an extension of its contract for the prolific Barmer oil and gas block in Rajasthan and also a better price for crude oil produced from the block.
“Cairn has not submitted the information sought from it yet. The government was already working on PSC extension and it was under process. The decision was expected anytime soon. There was no need for the company to move court on an issue, which was already heading for a decision,” an official privy to the developments told FE. FE reported on July 13, that DGH has asked Cairn, which holds 70% in the onshore Barmer block, to come up with a tentative exploration programme for 10 years beyond 2020, as a pre-condition for the contract’s extension. DGH, sources added, apprehends the London-headquartered Vedanta Group may dip into Cairn’s cash pile of around Rs 17,000 crore to repay its hefty debt, which could hit capex at the Barmer project. On June 14, the Vedanta Group had proposed that Cairn India be merged with it via a 1:1 share swap in a $2.3-billion deal.
ONGC, a 30% partner in exploration from Barmer fields, termed Cairn India’s plea as “immature.” It said it is the government’s prerogative to decide price of production, for which it needs to be given reasonable time to decide. Counsel K R Sashiprabhu, who appeared for ONGC in court, said it required more inputs from Cairn on project viability.
Petroleum minister Dharmendra Pradhan said the government would carry out “due-diligence” before taking a decision and there is no delay on the issue.
