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NEW DELHI: State-run ONGC has won international arbitration for a total of Rs 1,000 crore in cost-sharing disputes against Petrobras of Brazil, ENI of Italy and Rocksource — now known as Pure E&P — of Norway more than a decade after the global majors exited three offshore exploration blocks in the Mahanadi, Krishna-Godavari and Cauvery basins.
The arbitrations were initiated between 2014 and 2016 through advocate K R Sasiparabhu.Proceedings against Petrobras of Brazil and ENI of Italy were launched in London and against Rocksource/Pure E&P in Delhi. All the awards in favour of ONGC were unanimous, which can be seen as vote of confidence in its workmanship — one of the arguments put forth by the foreign companies to avoid sharing of costs.
The disputes pertain to blocks MN-DWN-98/3 in the Mahanadi basin off the Odisha coast, CY-DWN-2001/1 in the Cauvery basin spanning the costs of Tamil Nadu, Karnataka and Kerala as well as KG-DWN-98/2 in the Krishna-Godavari basin off the Andhra coast.
ONGC had tied up with Petrobras of Brazil, ENI of Italy and Rocksource/Pure E&P for the blocks between 2002 and 2011, the time when wIndia’s flagship explorer as venturing into the frontier area of deepwater exploration and seeking technology.
Under the production sharing contract with the government, three exploration wells were to be drilled in each block under the minimum work programme and the partners were to share the costs. Altogether nine wells were drilled but all of them came out ‘dry’. In between, the foreign partners announced their exit and avoided paying their share of costs under various pretexts, including finding fault with ONGC’s work execution.
In the arbitration against Petrobras, ONGC was given an award of $50 million with interest against a claim of $60 million. The award in case of ENI was $20 million with interest against a claim of $33 million and in case of Pure, the arbitration gave ONGC the full amount of $20 million — altogether worth Rs 1,000 crore for ONGC.
The arbitrations were initiated between 2014 and 2016 through advocate K R Sasiparabhu.Proceedings against Petrobras of Brazil and ENI of Italy were launched in London and against Rocksource/Pure E&P in Delhi. All the awards in favour of ONGC were unanimous, which can be seen as vote of confidence in its workmanship — one of the arguments put forth by the foreign companies to avoid sharing of costs.
The disputes pertain to blocks MN-DWN-98/3 in the Mahanadi basin off the Odisha coast, CY-DWN-2001/1 in the Cauvery basin spanning the costs of Tamil Nadu, Karnataka and Kerala as well as KG-DWN-98/2 in the Krishna-Godavari basin off the Andhra coast.
ONGC had tied up with Petrobras of Brazil, ENI of Italy and Rocksource/Pure E&P for the blocks between 2002 and 2011, the time when wIndia’s flagship explorer as venturing into the frontier area of deepwater exploration and seeking technology.
Under the production sharing contract with the government, three exploration wells were to be drilled in each block under the minimum work programme and the partners were to share the costs. Altogether nine wells were drilled but all of them came out ‘dry’. In between, the foreign partners announced their exit and avoided paying their share of costs under various pretexts, including finding fault with ONGC’s work execution.
In the arbitration against Petrobras, ONGC was given an award of $50 million with interest against a claim of $60 million. The award in case of ENI was $20 million with interest against a claim of $33 million and in case of Pure, the arbitration gave ONGC the full amount of $20 million — altogether worth Rs 1,000 crore for ONGC.
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