OIL & GAS

Cairn, ONGC pay higher profit share for Barmer block

Vedanta Ltd’s Cairn Oil & Gas and state-run Oil and Natural Gas Corporation Ltd (ONGC) have paid higher profit share to the government for their Rajasthan block for the period after its production-sharing contract (PSC) came to an end on 15 May last year, said a top government official.

The firm promoted by Anil Agarwal and India’s state-run upstream explorer paid $55 million as higher government share from the Barmer hydrocarbon block, known as profit petroleum, for the period, following a Delhi high court order last month on an appeal by the Union government. The PSC was signed on 15 May 1995 for a 25-year period.

While Vedanta made the payment on 30 March, ONGC paid its share of additional 10% profit petroleum along with applicable interest on 31 March.

Metals and mining major Vedanta acquired Cairn India, credited with the largest onshore oil discovery in India, in April 2017. Cairn Oil & Gas accounts for around 26% of India’s domestic crude oil production and has a presence in 58 blocks. Vedanta is the operator of the Rajasthan block RJ-ON-90/1 with a 70% participating interest, while the remaining 30% is held by ONGC.

According to the contract, profit petroleum is calculated only after the companies recover all their costs.

Source
Livemint
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