The Hindu Business Line : Cairn says it has complied with DGH norms on gas reserves

The tug-of-war continues between the Directorate General of Hydrocarbons (DGH), the technical regulator for the exploration sector, and exploration and production (E&P) companies over announcement of gas reserves.

Cairn Energy, one of the companies questioned on the issue, said it was following norms pertaining to assessment of reserves and announcements related to it.

The DGH maintains that such announcements should be made only after due consultation and clearance from the regulator. In fact, senior government officials in New Delhi said that Cairn had assured them that it would keep the authorities concerned informed before making announcements on reserves. Sir Bill Gammell, Chief Executive, Cairn Energy Plc and Mr Rahul Dhir, CEO, Cairn Energy India met the DGH in New Delhi on Tuesday.

The DGH had pointed out that Cairn was announcing reserves to the London Stock Exchange without informing the Indian Government. Cairn Energy Exploration and New Business Director, Mr Michael Watts, said they have been informing the authority.

Similar objections have been raised in the case of other E&P companies that went public with their figures without informing the DGH. The DGH had questioned Cairn Energy's claims of a substantial increase in the reserve base of its Rajasthan oilfields. However, Cairn stuck to its figure of an estimated 3.5 billion barrels. The company said that an independent assessment by DeGolyer and McNaughton (D&M) estimates 3.4 billion barrels of oil equivalent in place in Rajasthan, which was close to what the company had estimated.

According to the DGH, Cairn's official approved reserves were lower than the claim.