Cairn wants faster 'discovery to production'

Vol 17, PW 2 (22 Aug 13) People & Policy

ONGC is backing Cairn India’s proposal to fast-track development of 26 discoveries in Rajasthan.

PETROWATCH learns ONGC uncharacteristically supported Cairn at a meeting called by oil secretary Vivek Rae attended by outgoing DGH director general RN Choubey, joint secretary Aramane Giridhar and ONGC director finance AK Banerjee to discuss a new policy framework that would allow operators to submit both the Declaration of Commerciality (DoC) and the Field Development Plan (FDP) simultaneously. If approved this will have enormous ramifications for all operators and could potentially reduce the waiting period that companies face from discovery to commercial production from 48 months to 18 months.

Cairn chief P. Elango met oil secretary Vivek Rae in April to request fast-track approval for present and future discoveries in Rajasthan.

Under the current system, once a discovery is approved, the operator has 30 months to drill appraisal wells and submit a DoC. The DGH takes a few months to approve and the operator gets a further 200 days to submit the FDP.

The whole process takes 48 months. Even though ONGC backs Cairn's proposal it insists on greater clarity over its share of production and development costs within the shortened timescale.

ONGC is worried Cairn might use the opportunity to 'gold-plate' or inflate costs. "We want the government to ensure ONGC gets its 30% share in production from all Rajasthan discoveries," says ONGC.

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