Cairn India is awaiting government approval for an over-arching integrated block development plan which envisages investment of Rs 5,000 crore on its Rajasthan oil fields between 2013-2016.
The company is also awaiting government decision on extending the Production Sharing Contract (PSC) of the Rajasthan block which is valid till May 14, 2020.
Cairn seeks extension of the PSC till 2030 as it feels that commercial production of oil from the block may go beyond 2040. The company also wants back all of the area it had contractually relinquished.
Meanwhile, the company suggested the government several amendments in the current practice of annual approvals for investments to be made and allowing of cost recovery.
The firm feels that if the government implements its suggestions, it would enable the firm expedite exploration and development works in the block and achieve the target of 300,000 barrels per day at the earliest.
In a recent letter to the union oil ministry, the company asked the government to do away with the current practice of given approval for spending upon establishment of a discovery as commercially viable. Instead, the company suggested the government to give blanket investment approvals to the entire integrated block development plan. Such a move would cut lead time between discovery and production by half to 18 months, the letter said.
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