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The Cabinet recently approved a new Marginal Fields Policy where explorers can bid for smaller fields and reap the benefits of a revenue sharing model. Bloomberg TV India caught up with Cairn India MD & CEO Mayank Ashar to sense the pulse of India Inc on the new reform measure.
It’s been a landmark shift for the Indian E&P Policy. Your first reading on the government moving towards a revenue sharing model?
I think this is a good step. Clearly the government is looking at what it can do to spur investments and growth in the country. What kind of interest really will these 69 fields evince? And will you specifically be interested in any of those?
Yes, as far as Cairn is concerned, we have two very good offshore blocks that we are producing from. The Rajasthan block where we continue to both invest and focus on production. But our market is much broader than Rajasthan and the offshore blocks we have. So we are always interested in blocks that come up and our team will look at it and analyse it. We believe in the growth in India and what’s buttressing our confidence is really our track record over the last 20 years… We are always interested in investments that provide returns.
Out of 69 blocks, 63 are relinquished by ONGC and 6 by OIL. The cost viability was not good enough. The results were not higher given the fact that crude and natural gas prices both have corrected. So, do you think it will be a viable option for a predominantly onshore explorer like you?
First of all, we do both onshore and offshore exploration. The oil prices are clearly low and what is required is that the companies have to really focus on Capex and Opex investments. We will look at it with a longer term time-frame in mind. Again, we will look at it in details but you know in the energy sector this kind of trades happen all the time. Actually, Shell has the Rajasthan block and they thought it was not viable. And Cairn came in and did a very good job. So when assets get switched over or one company is not able to make it doesn’t necessarily mean that it’s not viable. So the key thing is the sector needs to open up.
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