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More than a decade after ONGC abandoned it, Amguri block in Assam has now become a cause of concern for the oil and gas major.
Nearly an year after a Division Bench of the Delhi High Court left the field in ONGC's temporary custody, the E&P company is now spending money in ensuring the security of the assets, now lying idle, left behind by Canoro Resources Ltd.
According a sources, to make the matters worse, while erstwhile contractors of the field are queuing up for unpaid bills, ONGC is denied a mining licence by the designated authority for not having any participatory interest in the field.
In the absence of proper licence, ONGC cannot recover nearly Rs 3 crore against the previous sale of oil and gas from the field till December 2010.
The dispute
Canoro, which owned 60 per cent operating stake, has faced cancellation of production sharing contract (PSC) by the Union Ministry of Petroleum and Natural Gas following alleged sale of its stake to Mass Financial Corp at $95 million (over Rs 400 crore), without the consent of Indian regulators.
Though the Indian Government was in favour of transferring the interim operatorship to consortium partner Kolkata-based Assam Company (40 per cent) under the watchful eyes of ONGC; the court while hearing a petition by Canoro (challenging a previous court order in favour of the Government's decision) appointed ONGC as the interim caretaker of the field in March 2011.
Both Canoro and Assam Co did not respond to e-mailed queries from Business Line .
ONGC's headache
The development clearly proved to be a headache for ONGC which abandoned the pre-NELP field due to lack of viability, before it was transferred to Canoro-Assam Company consortium in 2005.
The field was producing nearly 1,000 barrels of oil, before the single well stopped production in December 2010.
An ONGC source said that the company was now paying for a host of security guards appointed to ensure security of the idle assets.
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