“This government’s emphasis on development is a mere lip service. Neither are the regulatory authorities nor partner companies planning to better the working conditions and increase production. Files are pending for ever and fields are lying without production,” said the Managing Director of a domestic exploration and production company, which is looking to expand abroad.
“It’s a prolific block but thanks to the objections from various parties, production has been shut for nearly four years while we are importing crude oil,” he added.
Partners say earlier there was a dispute with the Directorate Genaral of Hydrocarbon, but now the participating companies are objecting to various provisions.
“Only the licensee was to pay the cess and royalty. Now the partner companies are asked to share cess and royalty. To make more profit, contract terms cannot be changed arbitarily. Nothing has changed with the change in government,” said an official from HOEC.
PY-3 had been producing high quality light crude oil (49° API) at a rate of 3,300 bopd prior to its shutdown in July, 2011.
“Restarting production from PY-3 field has been a high priority and HOEC has been working proactively with all the joint venture partners to achieve this objective,” HOEC said in a statement on the website.
HOEC had a total income of Rs 627 million, around 48% less than the previous year, primarily on account of lower production in PY-1 due to steeper decline in reservoir pressure and higher water ingress in existing producer wells.
Another international firm, which partners Reliance Industries in a few blocks, says it is not interested in being in the country any longer.
“When we came to India, we were very positive about the prospects. We were promised a great deal but nothing has worked so far. We have been forced to exit India,” said the CEO the international exploration and production firm on the condition of anonymity.
“We are disappointed by the way the government is working in India. Nobody is interested in business and progress,” said a senior official from another international company on the condition of anonymity.
BP Plc has already written down the value of its investment in eastern offshore KG-D6 block by $ 790 million besides another $ 830 million in impairment charges, following lower-than-expected gas price hike.