British Gas wants to settle oilfields issue
By Alok Agarwal | 24 Oct 2001
British Gas had picked up Enron's stake through an all-cash deal of $388 million early this month. But it had issued a rider then saying that the deal will go through only if it is given full rights of operatorship to the fields. The operatorship currently vests with ONGC and Reliance. British Gas has plans to make an additional investment of $250 million to make the fields more productive.
In its latest attempt to acquire the rights of operatorship, British Gas has offered equity partnership in its exploration venture in Brazil, sources say. “British Gas is also said to have offered some cash payments to ONGC along with equity in its Brazil venture in lieu of its operatorship rights of Panna, Mukta and Tapti oilfields.“
Nevertheless, it is not known what has been ONGC's response to the offer. It is also not clear what view Reliance has taken to the crucial issue of operatorship. Spokespersons of these companies said it would be premature to say anything at this juncture as discussions are still on.
Rights of operatorship were offered by the government in 1993 to lure foreign companies to invest in the vital oil-drilling sector in India, when it had opened the segment to foreign investment following liberalisation policies. Rights of operatorship lead to additional income for the holding company.
