ONGC Chairman R S Sharma on Monday said the royalty issue on Cairn India’s oil field in Barmer, Rajasthan, should be resolved before the state-run company hits the capital market with its follow on public offer. “The government has assured us of a settlement (on this issue). It is a sensitive issue from the investor’s point of view and will definitely get resolved before the FPO is launched,” Sharma said.
ONGC, which is paying 100 per cent royalty to the government on oil produced from the Cairn India operated Barmer block in Rajasthan, has been wanting the government to split the royalty payments with Cairn India.
Total royalty payment over the life of the block is likely to be around $2 billion. Sharma said ONGC won’t continue to pay a 100 per cent royalty on the Rajasthan oilfields.
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