MUMBAI�India's delay in awarding development licensed on discovered oil fields should end, say observers. India�s Samajwadi party leader Mulayam Singh Yadav says one consortium has delayed for 4 years the signing of the production-sharing contracts it was awarded, effectively blocking others from taking the contacts.
In 1993, the government initiated a program for the development of select discovered oil fields with the assistance of the private sector. The idea was to signal the opening of the hydrocarbon sector and inject into it private capital and the latest technology.
On the basis of this program, PSCs were signed between the government and several private-sector companies. In most cases, the government has benefited because oil production from these fields has risen considerably, yielding financial returns.
But in 1996, a consortium comprising Essar Oil Ltd., Premier Oil PLC, and India's own government-owned Oil & Natural Gas Corp. was awarded the Ratna and R-series oil fields. PSCs for these two promising fields have not been signed.
�The government must either get Essar Oil to sign the production-sharing contract for Ratna and R-series oil fields or invite fresh bids, canceling those of Essar, so that production from these oil fields is maximized,� Yadav, who is also chairman of the standing committee on petroleum and natural gas, said in a letter to Prime Minister Atal Behari Vajpayee. �It seems odd that any single private company can delay a major government initiative and be able to nullify the entire logic behind the 'Discovered Oilfields' development program.�
Premier Oil officials did not respond to OGJ Online's requests for more information on the status of the PSC.
