The opinion of Solicitor General of India may sought by the Union Oil Ministry on whether Reliance Industries and Cairn India can be permitted to drill exploration wells in already producing oil and gas fields.
The Oil Ministry is contemplating asking Solicitor General Robinton Nariman for an opinion on if the contracts of RIL and Cairn or the mining lease given to them for producing oil and gas, permits drilling of exploratory wells, official sources said.
The Oil Ministry was in favour of granting permission to drill exploration wells within an oil and gas field, but with the condition that cost recovery of such wells would be allowed only in case there is a commercially exploitable discovery.
This essentially meant that cost for drilling any well that did not lead to a discovery or a small find that could not be independently produced, will not be allowed. At present, operators get to recover all their cost — whether successful or failed wells, from the oil and gas produced and sold from that particular block.
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