Cairn India loses heat ahead of Barmer oil & gas clearance

The Cabinet is likely to take decision on 10-year extension for the production-sharing contract (PSC) of the Barmer oil and gas block of Cairn India and Oil and Natural Gas Corporation (ONGC) in Rajasthan beyond 2020. Cairn India holds a 70 per cent stake in the Rajasthan block, while ONGC owns 30 per cent. The block RJ-ON-90/1 is spread over 3,111 square km, west of Barmer.

The government is also to give clearance to a group of 28 pre-NELP (New Exploration Licensing Policy) exploratory blocks, including the Barmer block. The Cabinet had cleared the extension of 28 small and medium-sized discovered fields in March 2016. As per Cairn India, the PSC extension of Barmer block would add another 250 million barrels of oil equivalent into its reserves.

Meanwhile, Cairn India had approached the Delhi High Court, seeking its intervention for an early decision on the extension of the PSC. The court has asked the government to come up with a decision soon.

The share price of Cairn India has declined by 1.92 per cent on bourses in early trades; and is trading at Rs 227.5 on an intraday basis.