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Oil cos get govt notice for delay in paying royalty The government is taking a tough stand against oil majors ONGC, RIL, Cairn and the BG group (British Gas) for delaying payment of royalties. “Notices have been served to the members of the two consortia operating PMT (Panna-Mukta & Tapti) and Ravva fields for non-payment of government dues,” a source in the oil ministry said. Official sources said an audit by the Comptroller & Auditor General (CAG) found delays in payment of royalty by PMT consortium from 1994-95 to 2001-02. As per the production sharing contract (PSC), the consortium is required to pay royalty on biannual basis and any delay in paying the same would attract a 10% penal interest. While it has imposed penalties against the PMT consortium represented by ONGC, RIL and BG, in the case of Ravva, it has directed Indian Oil Corp to pay a lower price for the crude it buys from the field by adjusting the royalty that is due from this field. Members of Ravva consortium are ONGC, Cairn, Ravva Oil and Videocon Industries. On an earlier occasion also the petroleum ministry had warned PMT joint venture against the late payment. “Delay was found in royalty payment by the consortium in 1995-96 and the ministry had asked it to pay the fine,” a source said. It is understood from official sources that PMT partners did not pay any attention to the ministry’s demand. When contacted, Cairn India spokesperson declined to comment on the issue. Email enquiries to RIL, ONGC and BG group remained unanswered. One of the PMT JV partner, however, said on the condition of anonymity that the consortium has submitted all relevant papers to the authority that rules out the government’s claim. The PSC for PMT was signed in 1994 between the government and consortium. ONGC holds a 40% participating interest in the oil and gas blocks, while balance 60% interest is shared equally between RIL and BG Energy Holdings. The Panna-Mukta fields produced 1.77 million metric tonne (MMT) of crude oil and 1,662 million standard cubic meter per day (mmscmd) of gas in 2005-06. The Tapti field produced 2,228 mmscmd of natural gas during the same year. In the case of Cairn-operated Ravva, petroleum ministry advised Bongaigaon refinery in Assam to deduct the penalty amount (due to late payment of royalty) from the sale proceeds of the contractor in ratio of their respective participating interests. ONGC is 40% stake holder in the field. Participating interests of Cairn in the field is 22.5%, Singapore-based Ravva Oil (12.5%) and Videocon Industries is 25%. The average gross production from the field for 2007 was 60,441 barrels of oil equivalent per day (boepd), comprising average oil production of 48,078 bopd and average gas production of 74.18 million standard cubic feet per day (mmscfd).