Pratim Ranjan Bose

Kolkata, Jan. 25

THE Panna-Mukta-Tapti joint venture between ONGC, Reliance and British Gas, will soon approach the Union Ministry of Petroleum and Natural Gas, seeking its nod to prevent Indian Oil from taking the oil produced.

PMT currently produce 37,000 barrels per day (bpd) of associated oil, which will go up to over 50,000 bpd in late 2007, following the development of two more platforms. The joint venture now wants to nominate Mangalore Refinery and Petrochemicals Ltd (MRPL), an ONGC subsidiary, for lifting the oil.

PMT sources said that the plea, if approved by the Ministry, would enable PMT to recover the transportation, storage and handling cost (from MRPL), which was covered by the existing arrangement with IOC. Industry sources said that the joint venture would gain by an additional $8-12 million by effecting a new pricing arrangement.

"We are currently negotiating nominations from the partners to sell the entire oil production to MRPL to pave way for increased recovery. Following which we will approach the Petroleum Ministry with a formal request," a PMT official said, adding that the "proposed arrangement would benefit the joint venture substantially."

ONGC, the joint venture operator, has also entered into an agreement with other partners recently, underlining the transportation and handling cost involvement.

According to sources, as per the existing arrangement with IOC, PMT is failing to recover the lion's share of the transportation and handling cost of crude from the single buoy mooring facility to the storage cum supply point.

"The impending conditions force us to bring oil using smaller vessels. IOC pays us handling charges as per international rates applicable to larger vessels. This has been a constant source of irritation between us for more than a decade and our request for enhanced payment was never reciprocated," the official said.

(This article was published in the Business Line print edition dated January 26, 2006)
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