Sanctions,what sanctions??? U.S companies grab majority of the contracts.
Source: Economic Times.
[For Private use only.]
US companies grab major chunk of oil exploration contracts
Our New Delhi Bureau
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NEW DELHI 15 MAY
IN A clever move to combine tough rhetoric with an attempt to build a pro-India lobby of American companies, the government has rushed through a decision to sign production sharing contracts (PSCs) for 18 exploration blocks, 11 of which are with US petroleum companies.
Apart from expediting private investments in the hydrocarbon sector, the decision seems to have the strategic objective of creating a large group of American companies with a stake in India. It is hoped that these companies will persuade Washington to soften its stand towards New Delhi.
Following a PMO directive, which called expediting foreign investments in the core sector, most nodal ministries have taken far-reaching decisions in the past two days. Although the petroleum ministry was deliberating over the pending PSCs for some time now, the urgency to act is now apparent.
The government is seeking to ensure that imposition of economic sanctions by the US and other developed countries does not delay project schedules. Towards that goal, the government is already working on other funding arrangements. Plus there is an attempt to pile up as much private investments as is possible.
The PSCs for the 18 exploration blocks pertain to the fourth round of bidding for which the blocks had been awarded way back in 1994. In fact, the petroleum ministry which has identified the upstream sector as one of the key areas where investments by the private sector need to come, has been trying to resolve the contentious issue and decide on the PSCs. The necessary inter-ministerial consultations with law, finance and environment have been completed and all the issues have since been attended to.
The petroleum ministry issued letters to the petroleum companies who have been awarded the contracts and are now poised to sign the PSC on Thursday. The issues which had held back the signing of the PSCs include sales tax payment, audit practice, liability of the sub-contractor, etc.
Finalisation of the contracts is expected to give a boost to the exploration efforts in the country and will bring in an investment of about $40 million, including investments of about $25 million of foreign investments in the first phase itself. Positive results of the initial exploration in these acreages would lead to further investment.
Since the fourth round of bidding for exploration blocks in 1991 PSCs have been signed for nine exploration blocks covering an area of about 100,000 square kms spread over in Rajasthan, Gujarat Andhra Pradesh, Madhya Pradesh and Maharashtra. Of the nine blocks, four are onshore and five are offshore blocks.
Of the 18 exploration blocks to be signed, US alone would be exploring oil fields of 31,610 sq km in Gujarat, western offshore and Tripura. Videocon international has tied up with Command Petroleum of Australia to explore an area of 7,000 sq km off the eastern coast, while Medallion Oil Company of the US has joined hands with Assam Company Ltd to explore an area of 1,800 sq kilometres in Assam and Nagaland.
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