Indian Government Could Decide Operatorship Dispute

India's Minister for Petroleum and Natural Gas, Ram Naik, said he would facilitate an agreement between ONGC and BG Group if the ongoing talks between the joint-venture partners over the operatorship of the offshore Panna-Mukta and Tapti oil and natural gas fields fail. "Talks haven't failed yet. They're still discussing among themselves. The parties have to discuss and eventually agree over who the operator would be. It's a commercial dispute, but if there's a deadlock, I see it as my duty to facilitate an agreement," Naik said in a statement told reporters.

ONGC holds a 40% stake in the Panna-Mukta and Tapti fields located off India's west coast, while Reliance Industries Ltd. owns a 30% stake. Last month, BG finalized a renegotiated deal to buy Enron Corp.'s 30% equity stake in the Panna-Mukta and Tapti fields for $350 million. Under the new deal with Enron, BG said the management of the offshore oil and gas fields was no longer a precondition for the acquisition.

Although this represented a reversal from its previous position, when it insisted on managing the fields, BG said it wasn't bowing out of the management race. ONGC has offered "to operate the fields on a collaborative basis between the three partners on mutual confidence, transparency and credible approach." So far talks between the parties have ended without an agreement being reached.