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Monday, May 26, 2003

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Videocon Petro told to pay up Rs 285-cr dues

Balaji C. Mouli


THE Government has recently slapped a bill of around Rs 285 crore on Videocon Petroleum towards payment of profit petroleum from its Ravva oil field.

Profit petroleum (PP) is the revenue from the oil field once the developer has paid off the loans and other such obligations towards development and commercialisation of the field. It is shared between the developers of the field and the Government.

However, Videocon has not made any payment, ever since the field entered the PP payment phase over two years ago. The company had disputed both the amount to be paid as well as the time-frame for payment.

The Government, late last week, sought an upfront payment of around 25 per cent of the dues with the rest to be paid in instalments of around Rs 30 crore each month, according to industry officials.

In the Ravva oil and gas field, Videocon has 25 per cent stake, Cairn Energy 22.5 per cent, Oil and Natural Gas Corporation (ONGC) 40 per cent and Marubeni-owned Ravva oil Singapore 12.5 per cent.

Besides the PP payment, is the issue of payment of interest since the dues are longstanding.

The company has also used the Ravva oil field assets as collateral to raise over loans to the tune of over Rs 900 crore from financial institutions IDBI and UTI.

This was done without the Government's permission, a pre-requisite under the production-sharing contract between the promoters of the Ravva field and the Government.

In this regard, the Government had initiated arbitration proceedings early last year, which are still in progress.

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