CAIRN INDIA SET TO GET 10-YR EXTENSION FOR BARMER
In what could be a major relief to Vedanta Group firm Cairn India, the ministry of petroleum and natural gas is set to extend the production-sharing contract (PSC) for the country’s largest onshore block at Barmer in Rajasthan by 10 years. This means that the PSC will expire only in May 2030, as against May 2020 as currently scheduled, allowing the firm to tap the resources fully.
A longer PSC tenure will also be in sync with the firm’s plan to augment exploration and raise the output from the block, already India’s largest onshore crude-producing one, to 3 lakh barrels of oil equivalent per day (boepd) from around 2 lakh boepd currently.
Cairn India contributed a gross amount of R24,299 crore ($4 billion) to the exchequer in FY14.
Currently, Cairn shares more than 70% of the revenue generated from crude oil sales with the exchequer.
Cairn had sought the contract extension to petroleum ministry on April 5, 2013, but the ministry seemed inclined to extend the tenure by five years only.
*Source from http://www.financialexpress.com