The government has set up a five-member empowered committee to take expeditious decision on the proposed $ 230 million investment by ONGC Videsh Ltd (OVL) in Petro-Vietnam offshore gasfield.
The committee has been set up by the Cabinet Committee on Economic Affairs (CCEA) as a special case, since OVL had to take the decision by the end of this month, parliamentary affairs minister Pramod Mahajan told newsmen.
The empowered committee will consist of petroleum, economic affairs, legal affairs, external affairs secretaries and the ONGC chairman, B C Bora.
The minister said normally, OVL would have had to take CCEA approval for the investment decision. But due to paucity of time, the committee has been empowered to take the decision.
OVL, a wholly-owned subsidiary of Oil and Natural Gas Corporation, has a production sharing contract (PSC) with Vietnam's state-owned company, Petro-Vietnam, in which it would hold 45 per cent stake.
OVL had signed the PSC with Petro-Vietnam in 1988 for exploration of oil and gas in the offshore of Vietnam.
In 1992, OVL, with the government's approval, had assigned its 45 per cent participating interest to British Petroleum (30 per cent) and Statoil of Norway (15 per cent).
The consortium made a gas discovery in the block in 1992-93. The estimated gas reserves is of the order of two trillion cubic feet.
The main commercial terms agreement (MCTA) was signed between Petro-Vietnam and the consortium in 1996. After that, a memorandum of understanding (MoU) was signed between Petro-Vietnam and the
consortium, laying down the gas pricing formula and gas sales terms.
Pursuant to the provisions of MCTA, OVL has transferred 10 per cent participating interest to Petro-Vietnam out of its share. Therefore, the present participating interest of OVL in the project is 45 per cent.
The project development cost for producing natural gas is estimated to be about $ 508 million. The order of investment of
OVL's share, therefore, is $ 230 million.
