Questioning ONGC's decision of not exercising its pre-emptive rights in prolific Rajasthan oilfields, Mr Tapan Sen, Member of the Parliamentary Committee of Petroleum and Natural Gas, has sought an explanation from the Government.
In a letter to the Prime Minister, Dr Manmohan Singh, Mr Sen said that internal valuation done by Oil and Natural Gas Corporation (ONGC) needed a revisit before any decision on the $9.6-billion Cairn-Vedanta deal was taken.
Mr Sen sought details of the basis on which the ONGC board reached the conclusion that it was “economically unviable” for the public sector exploration company to exercise pre-emptive rights on the Rajasthan oilfields.
“The core issue has not yet been clarified as to why ONGC, having 30 per cent participating interest, has not claimed its first right of acquisition on these oil producing assets, with present production rate of 1,20,000 barrels of crude oil per day, which is likely to reach 2,40,000 barrels per day within a year. Instead, the GoM, constituted for the purpose, is only focussing on the peripheral issue of royalty and cess,” he said.
Terming the valuation as ‘opaque', he said it should be redone in consultation with the Comptroller and Auditor General in “national interest for rightful assertion of ONGC's right on these fields”.
He also contested the Prime Minister's Office plea of resource crunch for foregoing ONGC's rights on these assets.
“ONGC's present reserve and surplus of Rs 1.11 lakh crore and a profit of Rs 18,000 crore as on March 31, 2011, without any debt burden, does not give any scope of such apprehension,” he said.
Mr Sen, who is General Secretary, Centre of Trade Unions, had raised the issue in Rajya Sabha last year.