In a plea filed by Cairn India, seeking permission to export excess crude oil extracted from its Barmer oil fields, the central government was granted two additional weeks to clear its stand on excess crude oil extracted from Cairn India Ltd's Barmer oil fields in Rajasthan.
The Delhi High Court was hearing a plea where Cairn India said it is open to three options--selling the crude oil to the government as per the existing agreement, selling it to a domestic buyer at international rates, and exporting it. It added that it does not have enough storage capacity to keep the crude oil for long periods.
The court asked the government to clear its stand on the option that it is agreeable to, without any delay beyond the two weeks. The company had earlier said the government has already admitted that it has failed to lift the entire volume of oil extracted from the field, and despite repeated requests, the government has not allowed it to export the excess oil that it has not been able to lift.
Cairn India told the Delhi High Court that a loss of Rs 1400 crore has been caused to the government as the company was forced to sell its share of crude from its Rajasthan oil field to private players at prices 20 per cent less than the global rates. The contention was opposed by the Ministry of Petroleum and Natural Gas which told Justice Manmohan that the loss to the government as calculated by Cairn was "notional" and the company was incurring no loss either as it was selling the crude, not picked up by PSUs or the government, to private domestic players.
Cairn, a subsidiary of UK-based Vedanta group, told the court that as per the production sharing contract (PSC) it has with the government, it gets 70 per cent of crude produced from the well while the government gets 30 per cent.