Cairn may get more exploration time if it pays levies: report
28 Jul 2010
The government may give additional time to Cairn India for exploring more oil and gas in its Rajasthan oilfields provided the company agrees to pay levies in proportion to its stake in the energy asset, according to an Economic Times report which the company refused to confirm.
At present its 30-per cent partner, state-owned Oil & Natural Gas Corp (ONGC), pays the entire royalty on crude from that section of the field where commercial production has already started. Cairn is the operator of the field with a 70 per cent stake.
''Cairn has expressed interest in exploring the Rajasthan block. But exploration phase in the block is expired and it has to take fresh government approvals,'' the paper quoted an unnamed official in the directorate general of hydrocarbons (DGH) said. An email to DGH director general S K Srivastava did not elicit any response.
Replying to an email query, Cairn India director (corporate affairs and communication) Manu Kapoor said, ''We would offer no comments at this stage on this (issue).''
After a discovery is made in a block, the operator is normally allowed extension to explore the remaining field. ''But in this case, an extension would mean more trouble for ONGC,'' the DGH official said.
''It is unfair to force ONGC to pay for Cairn's share (of levies),'' an official in the oil ministry familiar with the development added.
