Cairn hasn't paid $400-mn royalties to ONGC on oil from Rajasthan block

Cairn Oil & Gas, a vertical of mining billionaire Anil Agarwal-owned Vedanta Ltd, has stopped paying for its share of royalty on oil produced from its Rajasthan block following differences with partner ONGC on cost recovery. As much as USD 400 million of royalty dues since July 2017 have not been paid to state-owned Oil and Natural Gas Corp (ONGC), sources in know of the development said. ONGC is the licensee of the Barmer block in Rajasthan, home to India's biggest onland oil discovery to date, and is responsible for payment of royalty at the rate of 20 per cent of the oil price on the entire output from the field irrespective of its stake. However in 2011, when ONGC gave its nod to Cairn being taken over by Vedanta, it was agreed that the two partners would pay for royalty in proportion to their share -- so Cairn was to pay for royalty on its 70 per cent share of oil and ONGC on 30 per cent. This was to be done by way of reimbursement -- ONGC would initially pay royalty on 100 ..

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