Oil companies confident ministry will keep its word

Vol 4, PW 3 (15 Mar 00) Exploration & Production

It is not often foreign oil companies have good words to say for the bureaucratic machinery that controls the Indian oil and gas sector.

But in negotiations for the NELP bids above, there is near unanimity that the government will stick to its word and meet the 31st deadline set by oil Minster Ram Naik. "It's the best performance we've ever had from them," said one negotiator.

"I think for once they'll meet their target," said another. A source confirms that much of the credit for progress goes to the 'Model' Production Sharing Contract (PSC) issued by Indian authorities, which forms the basis of negotiations.

Unlike past PSCs, this PSC clearly lays out what is negotiable and what is not negotiable. "We have our disagreements but the parameters are clearly laid out," adds a source close to talks.

Unusually, there is also praise for the Indian negotiating team led by Dr AH Sihag, which includes a second ministry official plus two representatives from the Directorate General of Hydrocarbons (DGH). This team is responsible for negotiating all 25 NELP exploration contracts on behalf of the Indian government, plus outstanding contracts from past rounds.

"We are very pleased with their performance," learns Petrowatch. "They haven't accepted everything we say but they're receptive to our points and that makes a big difference."