Centre To Decide On Extension Of Cairn India’s Barmer Oil Contract By October 14
The government assured the Delhi High Court on Friday that a final decision on Cairn India’s plea for extension of the production sharing contract of Barmer, Rajasthan oil fields will be taken by October 14.
State-run Oil and Natural Gas Corporation (Ltd. ONGC) notified the ministry of petroleum and natural gas of its decision to extend the contract in July and the Centre requires three months to give its final decision, the government informed the court.
ONGC had informed the Delhi High Court in July that they have approved the production sharing contract with Cairn India for Barmer oil fields in Rajasthan.
ONGC has agreed to a 10-year extension of the contract with Cairn India after the original contract expires in 2020. The company’s counsel Shashi Prabhu had told the court in July that the PSU has sent the extension approval to the ministry of oil, petroleum and natural gas.
In April this year, the high court directed the government, ONGC and Cairn India to decide on the issue at the earliest.
Cairn India’s counsel argued that the company has been in talks with international lenders and cannot keep in abeyance a proposal for further investments of over Rs 30,000 crore in Rajasthan fields. Cairn India plans to invest in additional infrastructure after the original contract expires on 2020. “The government was supposed to take a decision in June but it’s September now and nine months since the high court’s order. The company supplies 27 percent of oil and gas required by India,” argued Sundaram.
The government further informed the court that they will not necessarily approve extension of the contract on the same terms and conditions as the previous one.
Sundaram refuted the government’s plea for further time by saying that the Centre has been saying “all along that ONGC will decide. Now when ONGC has decided, the government is not moving forward with it.”
Cairn India’s Rajasthan block comprises Mangala, Bhagyam, Aishwariya and Raageshwari oil fields.
The high court will hear the case on November 4 after the Centre submits its final decision.