Cairn not to get back relinquished Barmer block areas

Cairn not to get back relinquished Barmer block areas

The oil ministry has rejected Cairn India Ltd’s request to return areas in its Barmer oil and gas block the company had relinquished in accordance with the terms of contract.

Sources said the ministry had conveyed its decision to Cairn CEO Mayank Ashar on November 24. It was explained to Cairn that there was no legal ground for accepting the company’s proposal, which would have created a precedence.

The decision clearly signals the ministry’s unwillingness to allow any special dispensation to companies and go strictly by the book under the watch of Dharmendra Pradhan.

TOI had on April 19, 2013 first reported then Cairn CEO P Elango requesting the ministry to restore the surrendered areas. Under the production sharing contract, explorers are allowed to retain only the development and discovery areas after each phase of exploration.

Cairn is operating three development areas in the block totalling 3,111 sq km out of the total block area of 11,108 sq km and surrendered 7,997 sq km. “The fact that we already have significant technical and scientific knowledge over such relinquished area would certainly enhance the chances of exploration successes,” Elango had written to the ministry while seeking restoration of the areas.

Elango had also pointed out that Cairn was “uniquely positioned to expediently and economically explore, develop and produce from the relinquished area with the already existing infrastructure”.

“At the time, no one knew the prolific nature of the block. Now that the prolific nature of the block is known, limiting exploration work to a minimum commitment meant only for bidding purpose can’t but be a matter of gross injustice and none else than the nation at large suffers from it more than anyone else. National interest truly deserves instant remedy,” Elango had argued before the ministry.

The ministry has rejected the arguments mainly on the ground that there is no legal provision and the fact that five CBM (coal bed methane) blocks have been carved out of the surrendered areas, two of which have already been offered for bidding. Returning these areas to Cairn would, thus, give rise to litigation and set a precedence for others to seek similar dispensation, which would defeat the very purpose of having the term for relinquishment.

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