Premier agrees Ratna joint operatorship on PMT model
Significant movement is reported on the long-drawn out saga of the unsigned PSC for Ratna and the R-Series fields offshore Mumbai.
An industry source tells us that in December Ratna joint venture partners Premier Oil (10% and operator), ONGC (40%) and Essar Oil (50%) initialled a Memorandum of Agreement (MoA) that will come into force once the PSC is signed. Of the several items in the MoA the most important is that Premier, ONGC and Essar have agreed to jointly operate the discovered fields.
“ONGC pushed hard for joint operatorship,†we hear, “and Premier accepted.†Still undecided is who will assume what responsibilities in the joint operatorship model.
But it has been broadly agreed that it will replicate the agreement between British Gas (30%), ONGC (40%) and Reliance (30%) at the Panna, Mukta and Tapti fields, which was hammered out at the insistence of former ONGC chairman Subir Raha in the face of opposition from BG, which eventually relented. “PMT is the existing joint operatorship model before us,†adds our source.
“It is logical to replicate it.†Two other key elements of the MoA relate to the handling and transportation charges for crude oil and the gas price.
“Partners have agreed that the handling and transportation charges will be finalised after negotiations with ONGC,†we learn. “The joint venture will also press for the gas price to be raised.
†Over the past few months ONGC has assiduously refused to “initial†the PSC but there is now talk that it could “initial†it sometime this week. Last year Essar and Premier “initialled†the PSC afresh, but ONGC held back.
All three partners first initialled the PSC in 2001 but there have been important changes since, at the insistence of the oil ministry and ONGC. One of the changes relates to Essar, which is forbidden from selling its stake for three years after signing a PSC or completion of the development plan, whichever comes later.