Govt to re-auction Ratna and R-series oilfields awarded to Essar Oil

The ministry of petroleum and natural gas plans to re-auction the Ratna and R-Series oilfields near Mumbai, awarded earlier to Essar Oil, with the effect that Essar would have to bid again if it wants the fields.

Reports quoting petroleum ministry sources said a cabinet note is being prepared now.

The Ratna and R-Series oilfields are located in the Ratnagiri shelf, south-west of Mumbai, in the prolific Mumbai offshore basin, and are part of the Bombay High oil fields.

The blocks were awarded to Essar nearly two decades (18 years) back, before the introduction of oil and gas auction rounds. The financial terms of the award are no longer valid.

No production sharing contract was signed because of differences over the issue of the quantum of royalty and cess the Essar Oil-led consortium (ONGC-Premier Oil) has to pay - the ones existing at the time of award in 1996 or the rates prevailing today. Hence the move to seek fresh bids, sources said.

The block may either be re-auctioned or given to ONGC, as per recommendation of an official panel.

The area is reported to have proven resources of about 900 million barrels of crude.

There was a controversy around the oilfields recently when the Aam Aadmi Party (AAP) had alleged that the petroleum ministry's cabinet note on the oil block contract favoured Essar and that petroleum minister M Veerappa Moily had overruled the opinion of the cabinet secretary, the finance ministry, the petroleum secretary, the Planning Commission and the opinion of the law ministry and wanted the contract to be signed with Essar based on the previous terms.