Canadian company Canoro Resources has withdrawn its appeal from the division bench of the high court here against the March order of a single-judge bench refusing an injunction against the termination of its production sharing contract in an Assam oilfield.
It, however, will continue to seek resolution through arbitration, invoked days before the PSC was terminated by the Union petroleum ministry in August last year. That was the first-ever PSC termination by the ministry. It came after Canoro, a listed Canadian company, transferred stake to another company, leading to change in ownership.
“The matter has become infructuous since ONGC has been made the operator of the block. Canoro, therefore, withdrew its review appeal earlier this week,” said a person close to the development.
Last August, the petroleum ministry had terminated the PSC between Canoro and Assam Company India Ltd (ACIL) for the Amguri block. Canoro owned 60 per cent and was the block operator, with ACIL holding the balance 40 per cent.
The ministry had terminated the PSC between Canoro and Assam Company India Ltd (ACIL) for the Amguri block. Canoro owned 60 per cent and was the block operator, with ACIL holding the balance 40 per cent. The termination, the ministry says, was justified due to a change in Canoro’s shareholding pattern. The termination order said Canoro had violated Article 29.2 of the PSC by not seeking the government’s consent before making a “material change” in the shareholding of the company.
In April last year, Canoro raised C$95 million through a mix of debt and equity from Barbados-based Mass Financial Corp, without the ‘required consent’ of the government. Mass Financial initially got 18 per cent equity in Canoro but after the closure of the rights issue, it now holds 52.9 per cent.
The Amguri field in Assam was producing about 1,000 barrels of oil equivalent per day (Boe) before its closure on December 3, 2010, on technical issues. According to Sproule, an internationally recognised body engaged in making resource/reserve assessments, the reserve of oil condensate and gas at Amguri stood at 12.287 million Boe.