Cairn output may slip as govt holds on to FDP

NEW DELHI: Cairn’s production schedule from Rajasthan oil field is likely to slip as the government is yet to approve the company’s new field development plan, involving about $750 million additional expenditure, on laying a pipeline from the oil field to a coastal location.

“The new FDP is yet to be approved,” a senior official in the petroleum ministry told ET. Sources close to the development said an in-principle agreement for including the pipeline cost in FDP is agreed between Cairn and ONGC consortium and the government during a discussion.

Members of the management committee, however, denied that Cairn has received any such approval. “There is no government communication to us and in the absence of that we are not in a position to consider the new field development plan (FDP). The new FDP is seeking an additional investment in the pipeline project, which would mean proportional decline in the government’s share (in the profit petroleum),” one member of the management committee said.