Honest broker DGH steers both sides to compromise

Vol 4, PW 23 (20 Dec 00) People & Policy
     

Credit where credit is due and credit here goes to the Directorate General of Hydrocarbons for banging heads and bringing Niko and GSPC together.

As India's upstream regulator, the DGH must ensure that the terms of a Production Sharing Contract are met. It must also resolve disputes.

"We must honour contracts otherwise no one will take us (India) seriously," a government source tells Petrowatch, "These are international commitments. They can't be treated lightly.

If we can't show that we respect contracts, they'll throw tomatoes at us when we land in Houston (for the road show)." On 26th November, DGH boss Avinash Chandra went to Hazira with three officials for an on-the-spot look. Two days later, he called a meeting at the DGH, attended by Bob Ohlsen of Niko and Sanjay Gupta of Gujarat Petroleum.

"This meeting was held in a cordial and business-like fashion and continued until the evening," reveals a letter to the oil ministry dated 29th November, "Due to the efforts made by the DGH and because of the positive attitude adopted both by GSPC and Niko, good progress was made to resolve some of the major issues." Progress was so good that Niko and Gujarat Petroleum - no doubt exhausted by Chandra's ability to hold marathon meetings - agreed to dispense with his efforts completely and promised to "submit a joint resolution indicating how best they will be able to work together" by 4th December. Result: the above MoU dated 3rd November.

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