The Hindu Business Line : PMT partners fined for late payment of Govt share

New Delhi March 11 ONGC, BG, and Reliance Industries, the joint venture partners of the Panna, Mukta and Tapti (PMT) fields, may end up forking out Rs 55 crore as penalty for late payment of the Government's share of profit from the fields.

The Petroleum Ministry has now asked the Government-owned marketing companies such as IOC and GAIL (India) Ltd to hold payments against purchase of produce from these fields till the joint venture partners make the penalty payment.

Sources said that the joint venture partners started paying the Government's share of profit only from November 2002, the reason why the Government was levying the penalty for the June-November 2002 period.

Under the PMT field contracts, the contractor is required to pay royalty and cess on crude oil and royalty on gas.

Contractors also pay profit petroleum to the Government as provided for in the contracts.

Profit petroleum

Profit petroleum is in the nature of non-tax revenue receivable by the Central Government out of the profits generated from production of crude oil and natural gas from the fields.

Further, the leaseholder is liable to pay royalty in respect of any mineral oil mined, quarried, excavated or collected from the leased area at the specified rate.

The Government's share of profit from Panna and Mukta stood at five per cent and up to 20 per cent from Tapti.

However, for the current year the Government would not get any share from the Tapti fields, as the joint venture has not made profits because of enhanced investments.

ONGC has 40 per cent share in the fields, while Reliance Industries hold 30 per cent each.

Output

The partners produce 40,000 barrels of crude oil a day from Panna-Mukta and earnings from crude oil alone are $650-700 million annually.

The joint venture is now looking at enhancing production from the fields.

While gas output from Tapti is expected to go up from the current 11 million standard cubic metre per day (mmscmd) to 17-18 mmscmd by August, crude oil production from Panna-Mukta is expected to increase to 50,000 barrels a day by the second half of 2007-08 once the ongoing expansion facilities are fully commissioned.

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