The ministry for petroleum and natural gas has recommended to the cabinet that future bids for discovered oilfields should be invited only by Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL).
Till now, the ministry itself has been inviting bids from private Indian and foreign oil firms for the development and production of these fields.
The ministry has also suggested that contract negotiations with the successful bidders for 12 discovered fields, awarded earlier, should be started as soon as possible. For these fields, the issue of past cost compensation can be separately settled between the government and the national oil companies, and should not hold up the finalisation and signing of production sharing contracts, it said. The profit petroleum from these discovered fields, or the administered pricing mechanism or a combination of both, can be utilised to settle adjusted past cost claims. ONGC is ready to accept such an arrangement. The measure has been taken following severe criticism from the two national oil companies regarding the reimbursement of past costs to them.
Even the Comptroller and Auditor General of India (CAG) made some observations on the issue and criticised the government for not providing a level playing field for national oil companies and private players -- by not offering international prices for oil produced by the national oil companies and exemption from customs duty. The Central Bureau of Investigation (CBI) has also registered a preliminary enquiry into the award of the Panna and Mukta fields to a consortium of Reliance and Enron.