Oil and gas producer Cairn India BSE -0.56 % could get the government's permission to explore the remaining two-thirds of the prolific Rajasthan block, which was relinquished more than 14 years ago by operators including Shell that had previously owned the block.
With its experience and new technology, Cairn is sure to raise the output at the block and could turn it into India's biggest producing field, surpassing Bombay High, government officials and industry executives said. "Sustainability of the Rs 37,000-crore 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," said a senior government official.
By the time Cairn entered the block as operator, 25% of the area was already relinquished and an additional 25% was relinquished within a short time, denying the company an opportunity to carry out optimal exploration works in the relinquished areas.
Cairn India did not respond to ET's email queries. Shell India Petroleum Development Co(SIPD) initially held the 11,558 sq km block. Cairn took over as operator in 2002 and announced a major discovery in 2005. By then, 8,447 sq km area of the block was already relinquished as per contractual terms, officials said.
The Rajasthan oilfield is currently producing 1,85,000 barrels of oil per day and has in-principle approval to raise the block's output to 3,00,000 barrels over the next three years. The remaining two-thirds area of the block also has a huge potential, a senior executive said.
Vedanta group chairman Anil Agarwal had initiated this proposal about six months ago. In a letter to oil minister Veerappa Moily, he had requested for restoration of the relinquished area to harness full potential of the block, officials said. Vedanta group had acquired Cairn India about two years ago.
