Cairn India chief P. Elango upsets ONGC

Vol 16, PW 20 (02 May 13) People & Policy

ONGC is angry that Cairn India chief P.

Elango is going behind its back direct to oil minister Veerappa Moily to complain whenever there’s a problem. ONGC, we hear, is smarting over Elango’s decision in April to complain to Moily about ONGC’s refusal to approve an Enhanced Oil Recovery programme at Mangala, the largest of the Rajasthan fields at block RJ-ON-90/1, which produces 125,000 b/d.

“Moily called Vasudeva on April 12 telling him to speed up approval,” says an ONGC source, referring to company chairman Sudhir Vasudeva. “Cairn is always trying to pressurise us like this by going to the ministry.

Approvals are delayed because Cairn never gives full details.” Cairn asked ONGC to approve a $700m budget for the EOR programme in March to inject polymers into the reservoir, says a source.

Later the same month ONGC asked Cairn for a detailed cost breakdown. "Instead of giving us a cost breakdown,” adds ONGC.

“Cairn went to Moily to complain!” In private ONGC believes Cairn has inflated costs, saying this is why it can’t approve the EOR budget. "This programme should not cost more than $600m," says ONGC.

"This is why we want more details. Our board can’t approve a big amount like $700m without specific details.

” Cairn insists it has done nothing wrong. "We have an excellent relationship with ONGC," says a spokesman.

"The ministry wanted to know how we can expedite production so we gave them our integrated oil recovery plan, which we had already discussed with ONGC and the DGH.”

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