Prize payment dispute with Quippo lands in court

Vol 17, PW 22 (19 Jun 14) People & Policy
     

Hindustan Petroleum subsidiary Prize Petroleum is blaming partner Jaiprakash Associates (JayPee Group) for a payment dispute with driller Quippo Oil & Gas which has ended up in court.

On May 26, Quippo filed a petition in the Delhi High Court against Prize for unpaid fees of Rs14cr ($2.3m) after drilling two wells at 13,277-sq km NELP-VI block SR-ONN-2004/1 in the South Rewa basin. “We've paid our share of fees,” confirms Prize.

“But the remaining payment has yet to be made by Jaiprakash.” Faced with mounting debts and a short-term cash crunch, Jaiprakash has still managed to spend over Rs150cr ($25m) on the block and is committed to drilling the third well, adds Prize.

Arun Goel, Jaiprakash E&P vice-president, confirms a third well will be drilled after environmental clearance, but declined to comment on the court case. “Prize is operator and usually deals directly with Quippo,” adds another source.

“But any disagreement between Prize and Jaiprakash is their internal matter.” Prize drilled dry well SR#A last July to 3500 metres using Quippo's 2000-hp land rig.

A second well SR#C, spud on August 18 and drilled to 2500 metres through thick dolerite rock, was also dry. Jaiprakash meanwhile is not afraid of admitting its problems.

On its website a June investor presentation admits the group's total debt at Rs28,164cr ($4.8bn) on March 31 this year.