The Hindu Business Line : Govt offer to Essar Oil on Ratna field issue

ENDING an eight-year-long impasse, the Government has decided that if Essar Oil chooses to retain its 50 per cent equity in the Ratna and R-series fields, it will need to release the `charge' on the exploration assets in the next three months, according to industry sources.

The company had charged the assets, valued in the region of around Rs 1,000 crore, to Financial Institutions (FIs) such as ICICI as a guarantee to fund its upcoming 10.5-million-tonne refinery project at Vadinar, Gujarat.

The company has so far invested around Rs 6,500 crore in the refinery project, which has a completed cost of around Rs 8,000 crore. Of this, the debt component comprises Rs 5,852-crore.

In a recent meeting of the Empowered Committee of Secretaries (ECS), the Finance Ministry nominee argued in favour of Oil and Natural Gas Corporation (ONGC) taking over Essar equity in the asset. This view, however, did not prevail and the ECS set out several conditions such as the release of `charge' and certain amendment to the Production Sharing Contract, in order that Essar retains its stake in the exploration blocks. The ECS argued that Essar could not pledge the oil fields to fund another business.

Article E-Mail :: Comment :: Syndication

Stories in this Section
PM may decide on BSNL tariff

`Unviable routes cost Indian Airlines dear'

`Not true; it offered little value addition'

Govt offer to Essar Oil on Ratna field issue

VSNL announces VRS; scheme opens on May 15

Jaswant tables Action Taken Report on JPC findings — Closer vigil on stock markets

ED probe into 8 companies