The Hindu Business Line

Oilfield contract delay: House panel calls for action against Secretarie­s

‘₹26,200-crore loss over cancellati­on of contracts’

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In a first, Parliament’s Public Accounts Committee has sought action against Secretarie­s who delayed finalising contract for the Ratna and R-Series oilfields for nearly two decades, leading to a colossal loss of ₹26,200 crore to the exchequer.

The fields, in western offshore, were awarded to a consortium of Essar Oil and Premier Oil of the UK in 1996 but the contract could not be signed as the Negotiatin­g Team of Secretarie­s (NTS) held unfruitful deliberati­ons, resulting in eventual cancellati­on of the award in March this year.

Inordinate delay

“The process of reaching a decision to finalise the PSC (Production Sharing Contract) was not completed even after 25 years of policy decision, 20 years of award and 17 years of approval of CCEA (Cabinet Committee on Economic Affairs),” the PAC said in a report tabled in Parliament today.

Headed by senior Congress leader KV Thomas, the PAC “strongly deprecated” the rationale of NTS consisting of the Secretarie­s to the ministries of Petroleum, Finance, Expenditur­e and Law, to keep “such a calculated silence and inaction, if not indifferen­ce.”

The delay by these officials resulted in a loss of ₹26,200 crore to the exchequer and deprived the country of scarce resources for more than two decades, which was “tantamount to criminal negligence,” the PAC said.

It directed that “the responsibi­lity for causing inordinate delays in decision making may be fixed and action be taken against the officials concerned under intimation to the Committee.”

Other contracts

The field was awarded alongside 11 other small-sized fields but only the contract for this could not be finalised. PSC for the 11 small-sized fields were signed between February 2001 and February 2004.

“NTS ... did not adhere to its own targets of completion of negotiatio­ns within six months and kept setting targets for completion of negotiatio­ns and signing of PSC and held 20 meetings between November 1999 and June 2013. “Further, during the period from May, 2010 to July 2015, only two meetings were held and, on both the occasions, it was decided to hold another meeting to take a final decision in the matter,” said the PAC report.

Wrangle over royalty

The contract was held up over the issue of the rate at which the Essar Oil-Premier Oil should pay royalty.

PAC “seriously deprecated the (Petroleum) Ministry’s indecision on all the related issues till March 10, 2016 which has directly compromise­d the national interest on energy security.”

It said “stringent action” be taken in this matter. “The Committee also desire that responsibi­lity of all the officials of the Ministry for indecision and their role in this regard be fixed and action taken against them under intimation of the Committee,” the report added.

 ??  ?? An aerial view of the Bombay High oil rig. The cancelled contract involved the Ratna and R-Series offshore oilfields on the west coast
An aerial view of the Bombay High oil rig. The cancelled contract involved the Ratna and R-Series offshore oilfields on the west coast

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