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Business News/ Industry / Energy/  Cairn India cannot export excess crude: govt to Delhi HC
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Cairn India cannot export excess crude: govt to Delhi HC

Court directs the government to file a detailed affidavit covering reasons for such a denial by 15 February

Cairn India said that despite repeated orders by the court, the partner had failed to clarify if it would pick up its share of the crude oil, forcing the company to sell it to domestic companies at a loss. Photo: ReutersPremium
Cairn India said that despite repeated orders by the court, the partner had failed to clarify if it would pick up its share of the crude oil, forcing the company to sell it to domestic companies at a loss.
Photo: Reuters

New Delhi: The government on Thursday told the Delhi high court that it would not allow Cairn India to export excess crude extracted from its Barmer oil fields in Rajasthan.

“India is not a crude surplus nation, in light of which a unanimous committee holds that it would not be correct to allow Cairn India to export excess crude from their oil fields," additional solicitor general Tushar Mehta told the court.

Justice Manmohan directed the government to file a detailed affidavit covering reasons for such a denial by 15 February.

On 19 January, the court had asked the government to explain its stand on the crude oil extracted from Cairn’s Barmer oil fields in Rajasthan.

Cairn, a Vedanta group company, has a production sharing contract (PSC) with Oil and Natural Gas Corp. under which it gets 70% of crude from the well while the state-owned company gets 30%.

“We are open to three options; selling the crude to government, selling it to domestic players at international rates or exporting it," senior advocate, C.A Sundaram had told the court on behalf of Cairn India.

He added that the company did not have adequate storage facilities to store crude for a long period of time.

Cairn India said that despite repeated orders by the court, the partner had failed to clarify if it would pick up its share of the crude oil, forcing the company to sell it to domestic companies at a loss.

Cairn also submitted that the government-owned partner had incurred a loss of 1,400 crore as its share was being sold to private players at rates lower than international rates.

The case will heard next on 18 February.

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Published: 04 Feb 2016, 08:06 PM IST
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