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New Delhi may allow Cairn India to explore Rajasthan oil block

12th November 2013

Cairn India may receive government approval to explore the remaining two-thirds of the oil block in Rajasthan

Oil block exploration
Cairn India to explore the remaining two-thirds of the Rajasthan oil block

The Indian government may give Cairn India a green light to explore the remaining two-thirds of the Rajasthan oil block The Economic Times reported. The oil and gas giant is confident it can increase output from the block, officials and executives have said.

 

The block was relinquished in 1999 by operators including Shell and the government has been looking to increase its output.

 

A government official said: "Sustainability of the INR 370bn (USD 5.82bn) greenfield refinery project in Rajasthan is dependent on oil produced from this block. We may approach the cabinet with a proposal to allow Cairn to explore relinquished areas in national interest."

 

The Vedanta group, which acquired Cairn India in 2011, has initiated discussions with Indian oil minister Veerappa Moily to restore the relinquished area of the block. Vedanta chairman Anil Agarwal has informed Moily that 80 per cent of the financial benefits will be offered to the government.

 

 

In a letter to the minister, Agarwal said: "As you are aware, we are merely a contractor and overall our share of revenue is less than 20 per cent. We would like to create significant value for the government. We would like to realise your vision to do more exploration and more oil production so our country is less dependent on imports."

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