Focus RJ-ON/6 arbitration battle with ONGC
Next month (June 2024), three retired justices will reconvene to adjudicate a payment dispute between ONGC and Delhi-based operator Focus Energy at Rajasthan block RJ-ON/6.
Justice AK Sikri, representing Focus, Justice L Nageswara Rao, representing ONGC and Justice Deepak Gupta (Sikri and Rao’s choice for the third arbitrator) will meet on June 15 (2024) in Delhi to decide Focus’s claim of Rs1500cr ($187m) from ONGC as past costs. The arbitration panel has met eight times, with the last meeting on May 11 (2024) in Delhi.
Previously known as Phoenix Overseas, Focus signed the PSC on June 30 (1998), which runs out on August 21 (2024). Focus wants a 10-year extension at the block, which includes the producing SGL, SSG and SSF fields.
As the block licensee, ONGC had the right to take 30% of any commercial discoveries but had to pay all government taxes. ONGC took 30% of SGL, which began production on July 10 (2010) but did not take a stake in the SSG or SSF fields, which began production on July 15 (2021).
ONGC did not apply for a PML in SSG or SSF despite instructions from the oil ministry and DGH to do so. Not finding it worthwhile to stay on, ONGC quit the block in 2016.
Disputing Focus’s claim for past costs, ONGC began arbitration in 2022. ONGC executive director of JV operations group Ajay Ratan confirms to this report that the arbitration is "at an advanced stage" but declined to share details.
In a text message, additional solicitor general of India N Venkataraman (representing ONGC) said: "The matter is ongoing and therefore will not be able to discuss it; kindly don’t mistake (sic)." Focus director PK Manocha’s text response was: "Sorry; I cannot talk as the matter is sub judice."
According to an anonymous source, ONGC claimed during the arbitration that Focus never included it in operations in breach of the PSC and JOA. ONGC also claims no non-operator audit was carried out at the block and that Focus never raised formal cash calls.