Government seeks USD 520 million from Cairn Oil & Gas; company slaps arbitration notice

NEW DELHI: The government has slapped a USD 520 million (around Rs 3,941 crore) demand notice on billionaire Anil Agarwal’s oil and gas unit Cairn after an audit found alleged discrepancies in cost recovery in the Rajasthan oil and gas fields operated by the company, sources said adding the firm has disputed the demand and initiated arbitration proceedings.

The Directorate General of Hydrocarbons (DGH), the upstream technical arm of the Ministry of Petroleum and Natural Gas, sought USD 520 million in additional profit petroleum for the government after an audit of capital and operating expenses incurred on the Mangala and other oilfields in the Rajasthan block RJ-ON-90/1, sources with direct knowledge of the development said.

The audit alleged discrepancies in the way capital expenses made on setting up the infrastructure to produce oil were booked.