Cairn won't get back lost Rajasthan acreage

Vol 16, PW 24 (27 Jun 13) People & Policy

Cairn India can kiss goodbye to its dream of getting back 7997-sq km of relinquished acreage from its RJ-ON-90/1 block in Rajasthan.

PETROWATCH learns the DGH wants to offer the relinquished area as three fresh blocks under NELP-X. This will be disappointing for Cairn owner Anil Agarwal who tried to convince oil minister Veerappa Moily on May 22 to return the relinquished area.

Cairn chief P. Elango also tried on April 5 with a letter demanding restoration of the block to its original 11,108-sq km size when the original PSC was signed with Shell.

Since then Cairn has been forced to relinquish areas where it has found no oil or gas and retained only 3111-sq km where it has made 26 discoveries. Cairn believes the relinquished 7997-sq km area has potential and should be explored.

"There's no chance Cairn can get the area back," stresses the DGH. "Cairn's only option is to submit the most attractive bid in NELP-X to win back the area.

" NELP-X will be launched in December this year with 60 blocks on offer: 23 onshore, 20 shallow water and 17 deep water. Half are recycled from earlier rounds or relinquished areas.

One piece of welcome news is that companies who win blocks in this round won’t have to struggle for defence or environmental clearances as they did with blocks from past rounds as these will be secured in advance. "Earlier we planned to offer 68 blocks,” says a source.

“But now we are planning only 60.” Note: DGH officials will prepare the final list of blocks to offer in NELP-X in the next two weeks.

Five Rajasthan blocks will be offered in total. Onshore blocks will also be offered in Assam, Tripura and the Cambay basin.

Explorers can look forward to three blocks offered in the offshore KG basin, home to Reliance's KG-D6 block. Offshore blocks will also be offered near Kutch, Mumbai, the Kerala-Konkan region and the Andaman Islands.

After finalising the names of the blocks, DGH officials will prepare a draft of the Notice Inviting Offer (NIO) to launch NELP-X. By September this year the DGH will organise an investors meet to take suggestions and prepare the Notice Inviting Offer (NIO) by December.

The DGH expects to open bids by April 2014.