Date:06/03/2007 URL: http://www.thehindubusinessline.com/2007/03/06/stories/2007030603620300.htm

Bengal offshore: Ministry favours ONGC's request for extension

Richa Mishra

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New Delhi March 5 The Petroleum Ministry is favourably considering a fresh extension of time sought by ONGC to complete the minimum work programme in Bengal offshore block. ONGC, which has been drawing flak for its exploratory performance time and again, seems to have put its case rather strongly this time.

ONGC has sought extension on grounds that formal communication for the last extension in 2006 was received late. Sources told Business Line that there have been instances where the Ministry has exonerated companies for delays in exploration activity and given them extension. Extensions have been granted mainly for delay in seeking environmental clearance or the company has received communication late.

A consensus seems to be emerging that the company should be compensated for the delay. However, the final decision would be taken at the Ministerial level. Responding to recommendations for relinquishment of the New Exploration Licensing Policy-II block WB-OSN-2000/1, ONGC had argued that it had received the formal communication granting the last extension almost at the expiry of the extended time period.

The Directorate General of Hydrocarbons (DGH) on its part has been maintaining that nothing beyond the extension policy can be considered. As per the provisions of PSC (production sharing contract), an extension of only six months can be granted to the operator for completing the committed work programme.

However, an additional 12 months was granted under the new extension policy. ONGC, which is the operator for the block has therefore been granted extension of 18 months in respect of WB-OSN-2000/1, the officials said.