Santos rewarded with PEL fee exemption

Vol 17, PW 16 (27 Mar 14) People & Policy
     

Santos has proved its commitment to India, refusing to quit even though work has stalled at its two offshore blocks since 2009 because of a maritime dispute between India and Bangladesh.

So the oil ministry has rewarded the Australian explorer’s patience by waiving the token annual Petroleum Exploration License fee of Rs3cr ($0.5m). A note prepared by the ministry requesting permission for the exemption from the Empowered Committee of Secretaries (ECS) is with oil secretary Saurabh Chandra who took over on March 1.

“The note was prepared during (former secretary Vivek) Rae’s time,” confirms a DGH source. “It needs Chandra's endorsement.

” The next ECS meeting is scheduled for April 11. A well-placed source says Santos works well with the ministry.

“The ministry likes Santos," he adds. "Unlike other foreign companies it has stayed in India.

” Despite setbacks Santos is confident about the geological prospectivity of blocks NEC-DWN-2004/1 and NEC-DWN-2004/2 and hopes a solution will emerge after elections. “Things might change if (Narendra) Modi becomes PM,” says a source close to the company.

“He understands the oil and gas business.” Santos has never asked to relinquish the blocks but according to leaked documents feels if there is no resolution to the maritime dispute then the best option is to return the acreage to the government without obligation for either party, financial or otherwise.

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