MoU signing with Statoil cancelled for no reason

Vol 6, PW 10 (17 Jul 02) Exploration & Production
     

Four months of negotiations and strained relations later, ONGC and Statoil have only a watered-down MoU to show for their efforts.

Yet even this faces problems. A much-heralded announcement of the MoU this month was mysteriously cancelled.

ONGC called a press conference in Delhi on (Sunday!) 7th July to unveil it, but then postponed it to the evening and then cancelled it without explanation. "Statoil was waiting for some clearance from their headquarters," reveals a source.

"They said it would come later in the day, and we postponed the press conference. But when we saw it was not likely to come even by the time they indicated, we cancelled the press conference." ONGC claims the MoU is still alive even though it awaits a formal signing.

Another source tells us the MoU is a watered down version of what ONGC originally wanted: there's no talk of a joint venture for ONGC's domestic deepwater acreage or joint exploitation of ONGC's marginal fields; nor does it talk of collaboration overseas. Only two areas of co-operation are mentioned: improved efficiency in deepwater drilling and Statoil's promise of help for ONGC's Institute of Petroleum, Health, Safety & Environment at Goa.

Sadly, ONGC and Statoil still disagree in two vital areas: Statoil wants the MoU to be governed by English law in London while ONGC insists on Indian law. "Government guidelines require PSUs to specify this in international contracts." Another area of dispute relates to cost sharing in ONGC's deepwater drilling campaign.

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