Shastri Bhawan meeting with GSPC over Niko

Vol 5, PW 20 (21 Nov 01) Exploration & Production

Newly appointed Gujarat Petroleum boss D.

J Pandian has received his first summons from Shastri Bhawan. A source tells us Pandian is scheduled to meet oil secretary Vijayendra Kaul on 21st November to discuss issues related to the row with Niko Resources.

Of these the most important is rights to a 36-inch gas pipeline from Hazira to Mora, which Niko argues is included in the PSC and over which both partners are fighting a legal battle. The other major issue is over demarcation of offshore and onshore areas to decide on royalty payments to the government for Hazira gas production.

Ministry sources see no breakthrough in the first issue unless Niko accepts their fundamental position that the pipeline is not part of the PSC. "This is the key sticking point between the two.

But we cannot go back on our position presented before the court." What does Niko have to say A source tells us Niko is willing to forego customs duty exemptions if the pipeline is included within the PSC. But the ministry is clear: no compromise on the stated GSPC position.

"The pipeline was neither in the PSC, nor in the development plan and nor was it approved." As to the demarcation of offshore and onshore areas, PETROWATCH learns the DGH is armed with charts from the National Hydrographic Office and estimates that 90% of the lease area is offshore and the rest onshore. Niko and GSPC are also squabbling over Hazira gas reserves.

Each of them has appointed separate consultants who have handed in widely differing figures.