July 28, 2010: The government may give additional time to Cairn India for exploring more oil and gas in its Rajasthan oilfield provided the company agrees to pay levies in proportion to its stake in the energy asset. At present its 30% partner, state-owned Oil & Natural Gas Corporation (ONGC), pays the entire royalty on crude from that section of the field where commercial production has already started. Cairn is the operator of the field with a 70% stake. After a discovery is made in a block, the operator is normally allowed extension to explore the remaining field. "But in this case, an extension would mean more trouble for ONGC," the DGH official said. "It is unfair to force ONGC to pay for Cairn's share (of levies)," an official in the oil ministry familiar with the development, said. If Cairn declines to pay its share of royalty (20% of sale value) and cess (Rs 2,500/ton) on crude produced from the field on future discoveries, the government may consider auctioning the remaining field beyond the area where oil has been already discovered, he said. Source: The Economic Times