ONGC Still Wrangling Over Offshore Fields

ONGC is adamant about securing operatorship of three offshore fields it holds jointly with Enron Oil and Gas India Ltd, according to an ONGC official. The reiteration follows BG Group's announcement on February 14 that it had concluded a $350 million purchase of EOGIL from the bankrupt Enron Corp. The fields in question are the Tapti gas field and the Panna/Mukta oil and gas field on India's west coast. ONGC holds a 40% stake in the fields, Reliance Industries owns 30%, and EOGIL was the operator and had a 30% stake. Operatorship is decided on a consensus basis between the three partners. BG has been unsuccessful in its attempts since late last year to get ONGC's approval for assuming field operatorship on its purchase of EOGIL.

ONGC is still angry that Enron ignored its rival offer for EOGIL, which it says was several million dollars above BG's. Until last week, ONGC was contesting Enron's sale of EOGIL to BG. Though ONGC has accepted the outcome on that issue, "we will not give up our right to stake a claim to the operatorship," the ONGC official emphasized. BG earlier scrapped a $388 million agreement from October last year for the purchase of EOGIL, which was conditional on the UK company acquiring operatorship of the fields. A revised deal unveiled January 23 reduced the purchase price to $350 million and dropped the operatorship condition.

BG said it would rename the acquired company BG Exploration & Production India Limited (BG E&P India). It added: "BG E&P India will continue to operate these assets. Discussions with partners regarding this arrangement are ongoing." ONGC said Monday it had not been officially informed of Enron concluding its sale of EOGIL to BG. The company's board at a routine meeting Monday was "verbally informed" of this development, the official said. ONGC had also not had any fresh offers from BG regarding the latter seeking operatorship of Panna/Mukta and Tapti fields, he added. ONGC earlier said it had rejected several "inadequate" offers from BG of equity participation in overseas acreages in return for its agreeing to giving the British company operatorship.


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