Industry analysts are divided on the issue of whether the government must allow Cairn India to explore the to re-explore an area of Barmer block that it had earlier relinquished.
Some experts feel that the government should not give back the area to Cairn India and instead put the asset for auction and allow the company to bid for it along with other players.
Some others, however, argue that the government must give the area back to Cairn India as the territory is known to the company.
Earlier, Cairn India is learnt to have relinquished the block thinking that it may not hold much reserves. However, now it feels that the area may hold more reserves than initially assessed.
The new assessment is based on the comprehensive review of the block’s resource potential undertaken by an exploration joint venture between Cairn India (70 per cent) and public sector ONGC (30 per cent). To exploit more oil, the joint venture wants to explore that area of the block that it had earlier given up.
Now, the union cabinet will take a decision on the request of the firm to re-explore the area of Barmer block. If approved, it will be the first such case in the Indian exploration and production business.