Petroleum secretary S Sundareshan has refuted ONGC CMD R S Sharma?s criticism that because of government delays, the state-owned oil explorer?s partners ? Norway?s Statoil and Brazil?s Petrobras?decided to quit its KG basin deep water block. Sundareshan, however, said the government is examining the concessions sought by these foreign companies at ?the highest level.?
It was widely reported in media that RS Sharma recently wrote to the petroleum ministry saying that red tape was making global oil majors apprehensive about risk sharing in the blocks where they pick up interest.
He pointed out that a decision was not taken by the ministry yet on the participation of these companies in the KG-DWN-98/2 block although ?farm out? agreements (subcontracting of the deep water field) was signed three years ago. Sharma told reporters on April 15 that the ONGC was talking to other potential partners. The company needs a partner for the technology to produce gas from ultra deep sea and for risk sharing.
Sundareshan told FE that it was not a matter of red tape at all because the overseas partners required more time to complete their obligations. He clarified that these foreign companies joined ONGC midstream when the state-owned exploration giant farmed out some of their assets to them. The foreign firms were not part of the initial exploration bids.
?It is possible that they may be leaving because of certain uncertainties on account of the holiday that is being envisaged on account of shortage of ultra deep rigs some years ago. What this really means is a concession in terms of the time frame. There is the concept of getting extra time on account of shortage of rigs. It is a concession being granted. That is not something guaranteed to anybody,? the secretary said.
Sundareshan said a decision is expected. ?Such concessions require examination and decisions at the highest level in the government. This is being pursued. The government is looking into all as aspects and a decision will be taken,? the secretary said.
?Concession being given is not part of any red tape,? Sundareshan added.
Statoil and Cairn India hold 10% each in the block and Petrobras 15%, while ONGC has the rest 65% in the field that has about 10 gas discoveries. The field, which is near to RIL?s prolific KG basin gas field, could produce about 20-25 million cubic meters a day of gas from 2013, Sharma said on August 15.