Centre may extend Cairn's oil exploration contract

The Centre is willing to extend Cairn India's current contract for the next 10 years, provided the government gets more share in revenues.

Rajasthan Chief Secretary C S Rajan said the Centre had conveyed the same to the company two weeks ago. Cairn India's contract to operate oil and gas block in Barmer ends in 2020. The company owns 70 per cent in the joint venture with the Centre, whereas the state government gets royalty.

The production of crude oil from Rajasthan began on August 29, 2009 nd 38.4 million tonnes (278 million barrels) was produced from Barmer-Sanchore Basin till March 31, 2015.

"The (Central) government's arguments are based on two factors. First, all oil blocks have been discovered. Second, the risk factor is very less. Cairn should not be having difficulty in sharing the profits. For the state government, the royalty amount remains the same because of fall in global crude prices," said Rajan on the sidelines of Resurgent Rajasthan Summit. The production of crude oil from Rajasthan began on August 29, 2009 and 38.4 million tonnes (278 million barrels) was produced from Barmer-Sanchore Basin till March 31, 2015.

"As per the latest estimates made by Cairn India, 6.5-7.2 billion barrels (900-1,000 million tonnes) of oil equivalent resources can be tapped from Unconventional and Tight Reservoir in Barmer-Sanchore Basin. The MoPNG (Ministry of Petroleum & Natural Gas), GoI (government of India) has granted permission to Cairn India for exploration in lease-hold area for the same," says the website of Rajasthan government's directorate of petroleum.