Still no PSC for Ratna, Karjisan and Ognaj

Vol 5, PW 1 (28 Feb 01) Exploration & Production

What of the three PSCs - one for Essar Oil and two for Selan Exploration - not signed at Delhi's Ashoka Hotel on 23rd February Selan, a small Indian explorer, was scheduled to sign PSCs for Karjisan and Ognaj.

Newspaper adverts highlighting the event said eleven PSCs would be signed - not nine. We learn that Selan pulled out at the last minute because of an offtake dispute with Indian Oil for crude at Ognaj.

"Selan said they'll either sign for both PSCs or neither," reveals a source, "We decided to put back the date until we resolve the problem about the crude offtake."Not surprising was Essar's absence. Controversy surrounding the award has been simmering for some time and it was never likely that the PSC would be ready by the 23rd February.

Things are looking up. We learn that on 20th February in Delhi a 'Negotiating Team of Secretaries' - senior bureaucrats that meet periodically to review sensitive policy decisions - met to decide whether to proceed with the award after hearing an evaluation by bankers ICICI on whether Essar is financially capable of pursuing a $300m development programme.

A source reveals that the panel agreed to uphold the award and to invite Essar to sign a PSC. Both Essar and Premier have heard this before.

Until we get a formal date for signing, there's every risk this saga will continue.