India approves ONGC, Cairn Energy farmout transactions

India has approved the farmout of certain Cairn Energy PLC deepwater assets to Oil & Natural Gas Corp. Ltd. (ONGC) and the farmout of two ONGC onshore exploration blocks to the London-based Cairn.

Sept. 3, 2004

By OGJ editors

HOUSTON, Sept. 3 -- India has approved the farmout of certain Cairn Energy PLC deepwater assets off Gujarat state to Oil & Natural Gas Corp. Ltd. (ONGC) and the farmout of two ONGC onshore exploration blocks to the London-based Cairn.

Carne, for $135 million in cash, will farm out to ONGC a 90% operated interest in deepwater exploration Block KG-DWN-98/2, effective Sept. 30, 2003, a 15% exploration interest in Cambay Block CB/OS-2 and a 10% interest in the Lakshmi and Gauri field development areas, both effective Jan. 1, 2003 (OGJ Online, Sept. 16, 2002).

ONGC, in turn, will farm out to Cairn Energy a 30% working interest each in onshore blocks GV-ONN-97/1 in northern India adjacent the Nepal border, and CB-ONN-2001/1 in Gujarat, western India, effective Sept. 30, 2003. Cairn will pay ONGC the value of the blocks as assessed by ONGC at the time of the bidding for the interests.