Cairn JV plans $2.6b capital spend

Aug 16, 2010 |

Correspondent

Cairn India and Oil and Natural Gas Corpo- ration are to spend $2.67 billion in capital expenditure in the Rajasthan block and $1.52 billion in operating expenditure, besides $941 million towards the cost of a pipeline to transport crude oil. ONGC’s net present value works out to negative $1.435 billion and a negative $1.471 billion at a crude price of $ 60 and 70 per barrel respectively. The negative NPV is a result of the state-owned ONGC being made liable to pay 20 per cent royalty on the entire crude oil production, while Cairn India is exempted from payment of any levy. The oil development cess has also been increased to Rs 2,500 per tonne.

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