If Hazira production drops we'll take it back

Vol 5, PW 6 (09 May 01) Exploration & Production

Niko Resources of Canada and Gujarat State Petroleum had better watch out.

If their heated court battle over rights to a 36-inch pipeline affects production at the Hazira gasfield, the Indian government will strip them of ownership. This dire warning is made to Petrowatch in confidence by a senior official in the Indian oil ministry.

"Hazira gasfield is my property," he tells us. "It would be very serious if production is affected.

If the contractor can't do his job, then I would have to get involved and find a contractor who can do the job." Our source tells us there is provision within the Hazira PSC to strip the 'contractor' of the award if he fails to maintain production. He stresses that the term 'contractor' covers not only operator Niko, but also partner Gujarat Petroleum.

Luckily, both companies are safe for the moment. According to the Directorate General of Hydrocarbons, there has been no fall in production at Hazira since litigation began.

Separately, we learn the oil ministry is bemused at Niko's decision to appeal against the 8th March High Court judgement against its claim to the 36-inch pipeline from Hazira to Mora, and has told Niko representatives in India to settle out of court. "Sanjay Gupta (managing director Gujarat Petroleum) wants to end this dispute," he adds.

"Why doesn't Niko Why are they so determined to pursue this case"

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