Panna-Mukta Oil Hunt Deal Papers Confiscated

The CBI which is conducting a preliminary enquiry into the deal will continue with its investigation if it finds evidence of some wrongdoings in the award of the contract. In 1993-94, the discovered and partially developed Panna and Mukta offshore oilfields of Oil & Natural Gas Corporation were awarded to Enron-Reliance combine for further development and production through a process of competitive bidding.

Because of intense competition, the award of the contract has been a subject of controversy since the time the evaluation of various bids was undertaken by the Excom group ofONGC. It was alleged the evaluation procedure was not transparent and that the Enron-Reliance combine was being unjustifiably favoured for the award. Following the selection of the combine as the best bidder, it was alleged that the high-profile consortium was trying to impose its own model contract on the government, which resulted in an official of the law ministry walking out of the negotiations. Later, when everything seemed to be going smoothly for the consortium, came the news that it had refused to pay ONGC past costs incurred by the corporation in the discovery and development of the two fields. Outstanding dues were recovereda from developers of the other oilfield, Ravva, which was awarded to private developers around the same time.

 

On the other hand, it is held elaborate governmental procedures were followed while awarding the contracts, eliminating the possibility of any manipulation by an individual official or a group.

Besides the Excom group, which evaluates all the bids though a highly-sophisticated computer software, its recommendations are examined by the empowered committee of the government and then the committee of secretaries before being sent to the Cabinet Committee on Economic Affairs (CCEA) for the final nod.

At each stage, the proposal is subjected to intense scrutiny and clarifications sought from concerned departments and ministries.

In fact, in the case of Panna and Mukta, the issue was fully examined to their satisfaction by Parliament's standing committee and the energy committee, where officers were summoned to clarify contentious issues.

Regarding the non-payment of past costs to ONGC, petroleum secretary Vijay Kelkar is on record saying the Enron-Reliance bid was the best among other bids for the two oilfields promising the maximum return to the exchequer. According to him, the take-off of free oil by the government more than covered the past costs of ONGC.

here are several ways the government can compensate ONGC for the past costs. While the non-payment of past-costs could be a temporary loss to ONGC, the bid had more than made up for it in its return to the exchequer.