Image courtesy of Cairn India.

Cairn India found substantial new reserves in the Barmer block in Rajasthan, India, the Financial Express said Saturday.

Cairn did not provide an outlook on its production.

The company has not filed any field development plans for new discovers with the oil ministry, the Financial Express said.

The block currently produces about 181,000 barrels per day.

Cairn has a production sharing contract with India’s state-owned Oil and Natural Gas Corporation (ONGC) in the block.

The contract expires in May 2020 and the block would return to ONGC.

Cairn has requested a ten-year extension from ONGC, the India-based Economic Times said.

Cairn projects Barmer production to grow at 7-10 percent from 2016 to 2019.

The contract currently allows a 5-year extension if there is a producing oil field and a 10-year extension for a gas prospect, the Economic Times said.

ONGC is the block licensee and Cairn is the operator, holding a 70 percent operating interest.

ONGC pays royalties to the government for its 30 percent stake and for Cairn’s 70 percent interest.

Although royalties are cost recovered, ONGC faces cash flow issues because of it and wants to renegotiate before extending the contract, the Economic Times said.

Rajasthan is located in western India and shares a border with Pakistan.

The Barmer block primarily produces crude oil and is India’s largest onshore production site.

In the 2014 fiscal year, the block produced 66.3 million barrels of oil equivalent (mboe).

Cairn is a Vedanta Group company.


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