As the oil ministry is looking at cancelling the award of Ratna and R-Series oil fields to an Essar Oil-led consortia,the firms British partner Premier Oil has warned of legal action,including under India-UK Bilateral Investment Protection Agreement.
The Ratna-R series of fields,located 90 km southwest of Mumbai in the Mumbai offshore basin,was awarded in February 1996 to Essar-Premier consortium through an open international bidding process then practised by the government for discovered fields. But signing of the production sharing contract (PSC) got delayed over several issues including dispute over net-worth of Essar and amount of cess and royalty to be paid.
Premier Oil chief executive Simon Lockett on August 22 wrote to legal affairs secretary Brahm Avtar Agrawal,saying the legal opinion obtained by the firm indicated that the Letter of Award granted positive rights to the consortium,including the right to enter into a PSC and a corresponding petroleum mining lease.
Lockett said oil ministrys indicated outcome would not be acceptable to Premier.