The Directorate General of Hydrocarbons (DGH) opined that Cairn India can repossess the almost 8,000 square kilometre of area in its prolific Rajasthan block
only by participating in future NELP or Open Acreage Licensing Policy (OPAL) bidding.
It may be recalled that Cairn India requested the government to return the area that it previously relinquished as it did not find oil or gas.
In a letter to the oil ministry, the DGH, which is the technical arm of the ministry, said return on nomination basis of any area that is previously relinquished is not legally tenable.
In order secure additional acreages, Cairn must participate in future NELP or Open Acreage Licensing Policy (OPAL) bidding with highest offer, the directorate said.
Originally, the Rajasthan block, RJ—ON—90/1, was awarded to Royal Dutch Shell in pre—New Exploration Licensing Policy (NELP) round and a Production Sharing Contract (PSC) was signed on May 15, 1995. Cairn subsequently bought out Shell in the block.
The block covered an area of 11,108 sq km. The PSC of the block stipulated three phases of exploration totaling 7 years, which ended on May 14, 2002, the DGH said.
According to the contractual requirement, Cairn relinquished or gave up areas were it had not found any oil or gas and retained only 3,111 sq km where it had made 25 discoveries.
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