Wednesday, January 24, 2024

In a cost battle with three global companies, ONGC gets an award of Rs 1,000 crore


NEW DELHI: State-run ONGC has won a progression of three worldwide discretion grants for a sum of Rs 1,000 crore in cost-imparting questions to Petrobras of Brazil, ENI of Italy and Rocksource — presently known as Unadulterated E&P — of Norway over 10 years after the worldwide players left seaward investigation blocks in the Mahanadi, Krishna-Godavari and Cauvery bowls.

The discretions were started somewhere in the range of 2014 and 2016 through advocate K R Sasiparabhu. Rocksource/Pure E&P — the final of the three arbitrations that were awarded in December — had its proceedings held in Delhi, while Petrobras and ENI had their proceedings held in London. ONGC has moved a proviso request in the Delhi High Court to guard the honor.

Every one of the arbitral honors were consistent, underlining a demonstration of positive support in the nature of ONGC's work execution, which was addressed by no less than one of the three unfamiliar organizations to try not to share costs.

The debates relate to impede MN-DWN-98/3 off the Odisha coast, KG-DWN-98/2 — which has begun creation as of late — off the Andhra coast and CY-DWN-2001/1 off the Tamil Nadu coast. Between the years 2002 and 2011, when it was entering the frontier field of deepwater exploration and looking for technology and expertise, ONGC had formed partnerships with foreign businesses to acquire these blocks.

Under the sovereign agreements for the blocks, ONGC needed to bore three investigation wells in each block under the base work program. The expense was to be shared by the accomplices. However, none of the nine drilled wells produced any water. In the interim, the foreign partners announced their departure and refused to share costs under a variety of justifications, including criticizing the execution of ONGC's work.

In the discretion against Petrobras, ONGC was given an honor of $50 million with interest against a case of $60 million. The honor in the event of ENI was $20 million with interest against a case of $33 million and if there should be an occurrence of Unadulterated, the discretion gave ONGC everything of $20 million — by and large worth over Rs 1,000 crore.

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