Cairn India may be given additional time by the Indian government so that it can explore more for oil and gas in its oilfield, located in Rajasthan, if the company agrees to pay taxes, proportionate to the stakes hold by the company in the energy asset.   

As of now, the entire royalty on crude from that section where commercial production is going on is being paid by its thirty percent partner, Oil & Natural Gas, which is a state-owned firm. Cairn is operating in the field with a stake of seventy percent.  

According to an official working in the Directorate General of Hydrocarbon (DGH), Cairn had shown interest to carry on with the exploration, in the Rajasthan block .It needs fresh approval from the government as the phase of exploration has expired. SK Srivastava, the Director General of DGH didn’t respond to the email, regarding this matter.

Manu Kapoor, Cairn India director of corporate affairs and communication, stated that the company has nothing to comment on this issue at this point in time.

Usually an extension period is given to an operator, after a discovery is made in any particular block, so that the remaining field can be explored. According to one DGH official, in this particular case an extension will add on to the troubles of ONGC, as it pays the full amount of taxes  

The government can decide to auction the remaining part of the block, which is excluding the area where already oil had been discovered, if Cairn refuses to pay its share of royalty which is twenty percent of the sale value and cess tax on future discoveries, which is two thousand five hundred rupees per ton on crude product produced from the field.