Cairn India, engaged in the business of oil & gas exploration and production is planning to invest Rs 5000 crore on its Rajasthan oil fields under the new integrated development plan within a time frame of three years.
Seeking the approval from Oil Ministry, Cairn, CEO, P Elango, said, "The company proposes to make risk investment of Rs 5,000 crore during 2013-16 under integrated block development plan in the interest of optimizing the potential of the block at the earliest."
Government gets profit from oil and gas operators only when the operators have recovered all of its investment. Because of this, the government does not give blanket investment approvals and only gives nod for spending upon establishment of a discovery as commercially viable.
Elango said that such an approval would cut lead time between discovery and production by half to 18 months.
Meanwhile, Cairn has also sought for the extension of the Production Sharing Contract (PSC) of the Rajasthan block which is valid till May 14, 2020.
However, Elango in another letter sought more than two-thirds of the Rajasthan block area which had been contractually relinquished.