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  1. ONGC to get its Ratna back after nearly 20 years

ONGC to get its Ratna back after nearly 20 years

ONGC is set to regain possession of the Ratna and R-series shallow-water oil fields, roughly 130 km southwest of Mumbai...

By: | New Delhi | Updated: June 9, 2015 1:20 AM
ONGC Videsh

ONGC had drilled 35 exploratory well and also set up a platform to monetise eight oil-bearing structures at a cost of 0-500 million. (PTI)

ONGC is set to regain possession of the Ratna and R-series shallow-water oil fields, roughly 130 km southwest of Mumbai, after an interval of about two decades. The petroleum ministry, which has for years been sitting on a request from the Ruias-promoted Essar Oil to finalise the production-sharing contract for it to commence work, is learnt to have come to the view that the fields be returned to state-run firm that discovered it.

Essar Oil was awarded the asset way back in 1996 through bidding, in pursuance of a policy adoptedby the Narasimha Rao government in 1993 that some discovered fields be given to private players for development.

ONGC, as reported by FE earlier, has been demanding that the asset be returned to it. ONGC chairman and managing director DK Sarraf wrote to the then petroleum secretary Saurabh Chandra a few months ago to press the PSU’s case.

ONGC claims to have found 57 million tonnes of in-place oil reserve in the Ratna and R-Series fields. Of this, it took out 1.36 million tonnes of hydrocarbon from February 1983 till September 1994 from nine development wells.

Essar Oil did not respond to email queries on the issue, while ONGC said it has not received any formal communication from the government.

At the time of bidding, these fields were seen to have a project life of 22 years.

None of the petroleum ministers since 1996 chose to take a decision on signing the PSC with Essar Oil.

According to industry watchers, audit objections by the Comptroller and Auditor General of India, CBI probes into some of the contracts awarded previously and a public interest litigation filed in courts have prevented the government from taking a call. Petroleum minister in UPA-II, M Veerappa Moily, in the final days of his tenure had recommended re-auctioning of the assets.

ONGC had drilled 35 exploratory well and also set up a platform to monetise eight oil-bearing structures at a cost of $300-500 million.

Of this, R12 is the main field, holding the maximum reserves.

Moreover, even though the Maharatna firm was not given the acreage, it continued to maintain the infrastructure through aerial surveillance, incurring expenses.

ONGC officials said that without operations the platform is at high risk of getting damaged. It is the need of the hour that ONGC lays its hands on more fields to increase its output given that many of the extant fields are ageing.

“The current reserves (of Ratna and R-series) are expected to be more than he projection at
the time of awarding,” said another source.

Two consortia — Reliance Industries with Sante Fe Energy and Essar Oil with Premier Oil Pacific — bid for Ratna and R-series fields. On February 2, 1996, the Cabinet Committee on Economic Affairs approved the recommendations of the empowered committee of secretaries to award the fields to the Essar Oil consortium. On March 12, 1996, a letter of award was issued.

The CCEA took over the matter again in 1999 and asked a negotiating team of secretaries (NTS) to come up with the terms of contracts. The NTS held several meetings between 1999 and 2013 failing to come up with amicable terms for sealing the production sharing contract.

Coming full circle

* Ratna and R-series fields, 130 km southwest of Mumbai, was discovered by ONGC
* Field was originally estimated to have 57 million tonnes of in-place oil reserves, the current projection is even higher
* Essar Oil was awarded the fields in 1996 after it emerged the successful bidder
* Successive governments opted not to take a decision on signing PSC with Essar given CAG audit objections and CBI probes into some previous awards
* Oil ministry is set to give the field back to ONGC

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