ONGC to allow Cairn to run oil block in return for higher stake.

State-owned ONGC may raise its stake in Cairn India's prolific Rajasthan oil fields as a condition for agreeing to allow the Anil Agarwal-group firm operate the block after expiry of contractual period.

Cairn's contractual term for exploring and producing oil from the Rajasthan Block RJ-ON-90/2 expires in 2020 and the area is to return to the block licensee, Oil and Natural Gas Corp (ONGC).

ONGC, which currently holds 30 per cent stake in the block, has told the Oil Ministry that the Production Sharing Contract (PSC) can be extended beyond 2020 if all parties to the contract agree on mutually agreeable terms.

'We are internally discussing Cairn's request for extending the PSC by at least 10 years. As a licensee, we have our concerns on royalty which would be like to be addressed at the time of extension,' a top ONGC official said.


BS