Govt to save $2 bn if our point accepted: ONGC

Denying claims made by Cairn India, ONGC has said the government will save $2 billion if royalty paid on the Rajasthan oilfields is allowed to be cost-recovered. ONGC owns a 30 per cent stake in the Barmer oilfields and pays royalty to the state government not just on its share, but also on the 70 per cent owned by Cairn India.

Over the field’s entire lifespan, ONGC estimates it will pay over Rs 14,200 crore ($3.15 billion) in royalty on behalf of Cairn India, which the government — in numerous commitments since 1997 — has promised to reimburse in full, sources said. ONGC has alternatively suggested that the royalty can be added to the project cost and recovered from the sale of up to 240,000 barrels per day of oil projected to be produced from the Rajasthan oilfields.