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Panna partners make peace

New Delhi, Feb. 10: ONGC, British Gas and Reliance will have an equal say in all the investment decisions pertaining to the offshore Panna-Mukta oilfields and Tapti gas fields as part of the new “joint operatorship” model being hammered out by the three companies.

Senior ONGC officials told The Telegraph that BG had agreed to the three companies jointly taking financial decisions pertaining to contracts for drilling and purchase of equipment.

The bitter year-long tussle between the two Indian companies, on the one hand, and BG, on the other, will now come to an end. The formal agreement is expected by the end of this month and will pave the way for fresh investments in the western offshore fields.

BG is currently operating the fields as it had bought the 30 per cent Enron stake. The British company wanted to continue as the operator which would have enabled it to take all major financial decisions.

However, ONGC was strongly opposed to this arrangement as it had a bitter experience with Enron, the earlier operator. The US company had handed ONGC an extra bill of $ 7 million which is now under dispute and is being arbitrated in London.

ONGC had insisted on having its own man as CEO of the company while BG could have the technical director’s post and a Reliance representative could be the finance director. Under the new arrangement, the CEO’s post will be held by each company on a rotational basis.

This means ONGC has also made a compromise as it had earlier issued a notice for removal of BG as operator by virtue of being the largest shareholder with a 40 per cent stake.

Enron had actually made a killing by selling its 30 per cent stake to BG for $ 350 million as only $ 24.6 million was paid for the 60 per cent stake that the US company and Reliance hold in the ONGC-discovered offshore fields.

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