Cairn India has stopped operations in two blocks during the second quarter ended September 30, due to "constant intervention" by the Ministry of Defence (MoD).
"In the KG-OSN-2009/3 and MB-DWN-2009/1 blocks, force majeure declared by Cairn India has been accepted by the Directorate General of Hydrocarbons (DGH) in view of the denial of Defence clearances to carry out seismic surveys," a Cairn India statement said.
Henceforth, the operations in the two blocks have been stopped in the July-September quarter, it said.
Force majeure is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance occur beyond the control of the parties.
Cairn has requested the DGH assurance that it will receive free and continuous access to the entire block and carry out the planned 3D seismic survey for six exploratory wells in initial phase, it said.
However, as there was constant intervention by the MoD in both the blocks, the oil major opted for force majeure which the DGH permitted, it added.
The company is in the process of seeking environmental clearance to enable acquisition of a 2D survey during the first quarter of 2012, it added.
While KG-OSN-2009/3 block lies in Krishna-Godavari basin, MB-DWN-2009/1 block is in the West Coast. Cairn already has one block (Pallar basin block PR-OSN-2004/1) under force majeure.
The Production Sharing Contract was signed in June, 2010 and the Petroleum Exploration Licence (PEL) was granted in August, 2010 for both the blocks.
The Director General of Hydrocarbons recommended Force Majeure to block KG-OSN-2009/3 because frequent MoD intervention in the block, the statement added.
Cairn had requested the DGH assurance that it will receive free and continuous access to the entire block and carry out the planned 3D seismic survey for six exploratory wells in initial phase.
However, as there was constant intervention of MoD in both the blocks, the oil major opted for force majeure which the DGH permitted, Cairn said.
Meanwhile Cairn India was adjudged the fastest growing energy company in Asia at the Platts Top 250 Energy Company Awards Dinner 2011, as part of the recently held Singapore International Energy Week.