Cairn confident of PSC extension
With less than four years to go, Cairn India is confident it will receive government approval on its request for an extension to the PSC at Rajasthan block RJ-ON-90/1.
"Cairn fully expects a positive response from the government," says a company source. "Many (investment) decisions are held up because of this delay." On January 31, the Delhi High Court directed the oil ministry to decide by February 28 on whether it will extend the RJ-ON-90/1 block PSC beyond May 14, 2020.
Sadly, the oil ministry is not so optimistic. "These things take time," says a ministry source.
"Policy decisions always take time." Equally circumspect is junior block partner ONGC, which holds a 30% stake at RJ-ON-90/1. One source predicts that if the ministry sticks to the court deadline it will grant only a five-year extension initially.
"That way the ministry can keep Cairn under control," he says. "A ten-year extension in one go will make Cairn arrogant." Under the Oilfields (Regulation and Development) Act, 1948 a PSC can be automatically extended if the field is producing.
