ONGC to discuss Cairn PSC demand on June 29

Vol 18, PW 21 (18 Jun 15) People & Policy

Despite repeated phone calls and high-handed pressure from the oil ministry ONGC remains reluctant to heed Cairn India’s repeated demand for a 10-year PSC extension at Rajasthan block RJ-ON-90/1.

On the agenda for ONGC's next Board meeting on June 29 is Cairn’s proposal to extend the PSC beyond May 14, 2020. “This is the fourth time in a year the Board is looking at this,” exclaims an ONGC source.

“This time it might decide in Cairn’s favour but how can it justify any extension without a revision of terms and conditions? All directors will be careful, everything is documented.” ONGC, he adds, faces a dilemma: it has no formal order from the ministry and is worried about granting the extension only to be accused of corruption later.

“We need something on paper,” adds an ONGC director. At the last Board meeting on January 21, ONGC agreed to approve the PSC extension on the government’s terms and in April the DGH asked ONGC to meet Cairn management to negotiate new terms and conditions.

The meeting took place but no details are available on what, if anything, was decided. “It (the meeting) was a smokescreen to give the illusion of negotiations,” we hear.

“There is no negotiation in reality, Cairn is being inflexible. This isn’t surprising, it has ministry support.