Cairn India gets ten year extension

New Delhi: Cairn India is likely to get a 10-year extension for its license to explore and produce oil and gas from the prolific Rajasthan block but may have to pay more profit petroleum to the government to get a term beyond 2020.

A committee headed by the directorate general of hydrocarbons (DGH) on policy for grant of extension to the production sharing contracts (PSC) for small, medium-sized and discovered fields that were awarded to private firms in 1990s, has recommended a uniform 10-year extension but on revised terms and conditions.

The panel has recommended that contracts may be extended for 10 years for both oil and gas fields or the balance economic life of the field, whichever is earlier, but with revised terms and conditions, sources said.

The current production sharing contracts provide for a 5-year extension in case of an oil field and 10 years in case of gas discoveries. It recommended a minimum 50 per cent government share of profit petroleum from small fields and 60 per cent in case of medium-sized fields.

In case of Cairn’s Rajasthan block, it is 50 per cent. Cairn’s Rajasthan block is not among fields for which the Committee has recommended the extension policy.