Rajasthan’s royalty mop-up jumps 23% on rising crude prices

JAIPUR: The spike in fuel prices in recent months may have dented household budgets but the state government is laughing all the way to as its from crude production has surged by 23% in the past six months. The slide in oil prices have more than halved the state’s royalty to Rs 2331 crore in 2017-18 from a peak of Rs 5,953 crore in 2013-14.
The government is now pushing Cairn India, major crude producer in the state, to ramp up production so that its monthly royalty revenue reaches closer to Rs 400 crore. In May this year, royalty revenue increased to Rs 316 crore from Rs 196 crore in the same month last year.

Currently, Cairn India is producing 165 barrels of oil per day (bopd). It has already announced to invest Rs 13,000 crore in the next two years to increase the volume of production from the Barmer blocks to 3 lakh bopd. The company came under pressure to step up production from 1.80 lakh bopd when crude prices crashed below $30 two years ago.

“The increase in crude prices have reversed a downward trend that was set in from 2014-15. If the current levels of around $75 per barrel is sustained, the annual royalty revenue could reach about Rs 3500 crore this year,” said Aparna Arora, principal secretary, mines and .

She said, the royalty revenue has been an important source for the state government and we want the production to increase so that even if crude prices fall, our revenues will not get affected in a big way.

“The chief minister had announced in the budget that production from Cairn India in Barmer will be raised to 2 bopd. That will increase royalty income,” said Arora.

In the recently held bidding under the Open Acreage Licensing Policy, Cairn has bid for 10 blocks in and sources said that the company has won all the seven blocks adjacent to its producing fields.

Top officials in the state petroleum department said these blocks, spread over nearly 1000 sq km, are estimated to have reserves of 7.8 bpod. It is expected that the awards for the fields will be given by the end of July. The crude producing fields of Cairn in Barmer have estimated reserves of 4.2 bopd.

Get latest news & live updates on the go on your pc with . Download The for your device. in English and other languages.