Companies that have bid for the right to seek and produce coal bed methane (CBM) blocks under the fourth round of auction will have to wait longer for the outcome as a committee of secretaries deciding on the bids has asked the department of legal affairs to advise on the controversy surrounding one of the bidders, the Deep CH4 consortium.
The panel comprising top officials from the ministry of finance, petroleum and natural gas and coal has asked the legal affairs department if it is right to reject the bids of the consortium, against which complaints have been received from other bidders. The upstream oil regulator, the director general of hydrocarbons (DGH), too, had recommended Deep?s bids? rejection following the complaints.
The panel of secretaries also wants the legal affairs department to advice whether it would be proper to consider certain fresh documents submitted by the Deep CH4 consortium, said a person privy to the development. The regulator recommended the rejection of the bids of Deep CH4, the provisional winners of seven blocks, saying it had not submitted the incorporation certificate and the charter of its parent, US-based Coal Gas Mart. The regulator also pointed out that Deep CH4 had not provided papers showing that Coal Gas Mart?s board had indeed authorised one of its officials to sign the performance guarantee of Deep CH4. Deep maintains that it was not required as per the notice inviting the bids. Sensing rejection of its bids in the final allocation, the Deep consortium too complained to the government that bids of rivals such as Australia?s Arrow Energy and Great Eastern Energy Corporation (GEEC) were incomplete, a person close to the consortium told FE.
Deep claimed that Arrow Energy?s credentials in CBM submitted to the government also reflects that of its other group companies and associates while a decision on the bids put in by Arrow?s subsidiaries should be taken only on the basis of the parent company?s standalone acreage, reserves, production and experience. (The financial and performance guarantee of the bidding company is provided by the parent.) Deep also alleged that Arrow has not provided any expenditure for the third phase of exploration. To an FE questionnaire, Arrow promised to respond but sought more time. Deep CH4 also alleged that GEEC?s bids were incomplete as its financial bid does not contain bid for the third phase of exploration. Deep also claimed that GEEC did not give commitments for setting up infrastructure facilities, which was asked for in the financial bid. GEEC denied all allegations emphatically and told FE that its bids were perfectly in order and that all work commitments have been fully made as per government requirement. GEEC added that all its gathering and distribution infrastructure is in place, which is continuously being expanded.