Our relationship with ONGC is not acrimonious: Cairn

Cairn India, the operator of the country’s largest on land oil block in Rajasthan, says the government must reorient its regulatory framework to encourage oil and gas production. ONGC must play the role of a facilitator rather than delaying the approval process, says P Elango, Interim CEO, Cairn India, in an interview with ET’s Shuchi Srivastava. Edited excerpts:


What is the status of all the pending regulatory approvals in the Barmer oil block?

Right now, the whole system works on a very linear basis. But what we have been demanding work on a parallel basis. Today to get approvals, for say100,000 barrels, I have to first go through the operating committee, where you have to wait for ONGC’s approval, which is not a bad thing. But I have been chosen as the operator because of a certain competence that I possess...you can’t have two people driving one vehicle. Our relationship with ONGC is not acrimonious.

How will you speed up the approval process?

We want things to move fast, but to get to the next stage we have to go to the management committee, which consists of Cairn, ONGC, DGH and the ministry. Unfortunately, now because we are contributing $20,000 crores to the public exchequer, the government’s focus has shifted to profit petroleum.

How will you deal with ONGC now?

Every barrel of oil produced in Rajasthan is equivalent to 2 barrels of oil produced by ONGC as this barrel does not suffer subsidy. They have to realise that this 30% stake is good for ONGC.

What about your $1 billion cost-recovery that is stuck?

Out of the $1 billion, only half a billion is actually stuck in multiple approval process. The balance is actually recovered but we just need a sign-off.

How will you raise production to 200,000-215,000 bpd?

I need 10-12 rigs. We want to drill 1000 wells over the next five years, but as of now I cannot seek approval for 1,000 wells, as I’m only allowed to seek approval for what I do in the next 12 months. Let’s look at integrated development.