Financial Daily from THE HINDU group of publications
Wednesday, Nov 23, 2005
Financial Daily from THE HINDU group of publications Wednesday, Nov 23, 2005 |
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Corporate
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Outlook ONGC seeks reimbursement of payments made for partners Richa Mishra
New Delhi , Nov. 22 OIL and Natural Gas Corporation (ONGC) has urged the Petroleum Ministry to expedite the process of reimbursing cess and royalty payments made by it for its joint venture partners in exploration fields. Speaking to Business Line, a senior official said the dues to ONGC on this account stood at Rs 283 crore at the end of March 2005 for the existing operating fields, and is expected to rise many fold once the Mangla field, operated by Cairn Energy in Rajasthan, becomes operational. ONGC would have to pay over $1 billion in royalty over the life of the field, which is much more than what a 30 per cent sharing in oil production would fetch the company. The official said that a proposal was being finalised in the Ministry to seek Government approval. However, the company has been informed now that the Ministry was asking for comparative economics of Lakshmi field, bringing out comparative profit/loss to ONGC under the present scenario and if the field was given to ONGC on nomination basis. The Government had signed 27 production-sharing contracts (PSC) prior to the New Exploration Licensing Policy (NELP). Under the PSC, ONGC and Oil India were liable to pay all statutory levies, including royalty and cess, on behalf of the other partners. ONGC has 40 per cent stake in Lakshmi fields. In view of the significantly different cost parameters and opportunities for optimising development and production cost, it would be inappropriate to make comparative workings of profit/loss under the scenarios of pre-NELP fiscal regimes and the fiscal regimes as applicable for nomination block, the official said.
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