Centre to submit decision on extension of Barmer oil contract by October 14

The current production sharing contract between Cairn and ONGC expires on May 14, 2020

The central government informed the Delhi High Court on Friday that it would submit its decision on the extension of Cairn India's production sharing contract (PSC) with Oil and Natural Gas Corporation (ONGC) by October 14.

In a December 2015 order, the court had given ONGC six weeks to respond to the extension sought and allowed the government another three months to make its decision on whether it would extend the PSC of the block RJ-ON-90/1, spread over 3,111 sq km to the west of Barmer.

In a July 28 hearing, the court had taken note of the government's failure at arriving at a decision in terms of the earlier order and directed the Centre to respond within a further period of five weeks from that date.

According to senior advocate C A Sundaram, Cairn has been in conversations with international lenders and could not keep deferring the proposed investment of around $3 billion towards expansion works in Barmer.

"The company (Cairn) supplies 27 per cent of the oil and gas requirement in India. The government was supposed to take a decision in May, but it is September now and nine months since the high court's order," Sundaram said.

The government counsel informed the court that it was unable to take a decision on the matter earlier, as ONGC had not approved of the extension till July 14.

After hearing the submissions made, Justice Sanjeev Sachdeva re-notified the petition for November 7, while allowing Cairn the liberty to approach the bench at an earlier date if the government fails in keeping its October 14 commitment. The current PSC between Cairn and ONGC expires on May 14, 2020.