The Hindu Business Line : IOC in talks with venture partners

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New Delhi Feb. 14 A solution to the commercial difference between the Government nominee, Indian Oil Corporation Ltd (IOC), and the joint venture partners in the Panna, Mukta and Tapti oil and gas fields may be round the corner.

This is even as one of the joint venture partners ONGC is trying to persuade the other two partners - Reliance Industries Ltd and British Gas - to consider selling the produce from these fields to its subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL) instead of IOC.

"Discussions are going on with the joint venture partners and the issue should get resolved," a senior IOC official told Business Line. Some of the pending issues include the payment of storage tanker cost, which according to joint venture partners, IndianOil has not been paying, leading to revenue loss for them.

Asked about the issue, IOC official said, the produce from the fields is not enough to bring in a larger vessel as well as the port facility is such that IOC is at a freight disadvantage.

Besides, IOC is also doing their work of storing and decanting of the produce, which ideally the producer has to do, he added.

On the issue of higher price offered by MRPL for the produce, the official said, "We are paying the international price. The crude is benchmarked with Brent." BG-ONGC-RIL produces 40,000 barrels of crude oil per day from Panna-Mukta fields and 5.5 million standard cubic metres per day (MMSCMD) of gas.

The earnings from crude oil alone are $650-$700 million annually.

If the joint venture partners agree, they would approach the Government to withdraw IndianOil as Government nominee for sale of oil from the fields, the sources said.

Further, if the Petroleum Ministry agrees to the demands, then the joint venture partners would be free to sell their share of crude oil from the fields to anyone they wish. The three partners would be entitled to crude oil proportionate to their shareholding — ONGC has 40 per cent interest in the joint venture while BG and RIL have 30 per cent each.