Ratna R-Series field which was awarded to a consortium may finally be cancelled. Even the Planning Commission is now of the opinion that canceling the Letter of Award would be an ideal step where contract for the field has not been concluded even after 17 years. The Planning Commission has also suggested that before taking a final decision on the matter the Ministry of Law & Justice or the Attorney General should be approached for a legal opinion.
Ratna R-Series field, located 90 km southwest of Mumbai in the prolific Mumbai offshore basin, was awarded in February 1996 to a consortium of Essar Oil (50%), Premier Oil (10%) with ONGC accounting for remaining portion under the second round of Discovered oil fields bidding held in late 1993. Both Eassar Oil and Premier Oil have already written to the Ministry recently to expedite the signing of PSC. The contentious issue is regarding cess and royalty – paying cess and royalty at old rates coupled with fixed cost recovery limit (CRL) or pay the levies at current rates with updated cost recovery limit on actual investments incurred. However, the government is uncomfortable with both the proposals. If an upward revision is allowed in the Cost Recovery Limit (CRL) for the field, the government fears that would reduce the government’s take on the field. So the stalemate continues and the precious foreign exchange is wasted in imports.