The directorate general of hydrocarbons, the technical arm of the oil ministry has approved Cairn India's proposal to commence production from Bhagyam, the second largest oil field in the prolific Rajasthan block, but the ministry has still not given the go-ahead.

Industry and official sources said that the company, which operates the block with a 70% stake, has been waiting for a year to obtain approvals to start production. Last week, the DGH, which is a part of the crucial management committee that oversees the block has given a nod to the proposal.

A person close to Cairn India said that "The DGH has given its approvals to commence production from Bhagyam, along with both the management committee and the operations committee. The matter is now with Jaipal Reddy's office.”

The person added that "The representatives of the oil ministry have also given their in-principle nod to commence production, so this further delay is quite nerve wracking.”

Cairn India has said it is ready to commence production from Bhagyam from the last quarter of this fiscal. Mr Mark Oliver Blanche director (upstream) of Cairn India had told ET in October that "We are ready to begin production of 40,000 bpd from Bhagyam as soon as we get the approvals. All the related infrastructure including pipeline is on track.”

(Sourced from ET)