The year-long standoff between British Gas and ONGC over operatorship of Panna-Mukta and Tapti oil and gas fields has been resolved with the British firm agreeing to share the CEO’s post in the joint venture on rotational basis.According to the compromise formula, the offshore fields would be jointly operated by ONGC, BG group and Reliance Industries (the third partner) and the top post rotated among them, informed sources said.ONGC would appoint the first CEO to the unincorporated joint venture for a two year period, after which BG and RIL would take turns at the top job.While each of the three would be assigned a task, the contentious multi-million dollar contract would be jointly awarded by the three, sources said.The British firm would be in charge of the operations and technical services while RIL would look after finances and commercial interests of the joint venture. Procurements and contracts would fall under ONGC’s responsibilities.Sources said the entire board of directors of BG group would visit India early next month and the joint operatorship agreement is likely to be signed before their visit.The resolution to the row came after senior ministers refused to accede to a BG request for intervention in its favour to get the operatorship of the fields to which it claimed stake after buying the entire 30 per cent shareholding of US energy trader Enron, who was the operator of the field at that time.When contacted, bg India director Pravin Tandon said the partners would soon sign a formal agreement settling the issue. ONGC chairman and managing director Subir Raha was not available for comments.The breakthrough came after ONGC refused to settle for anything less than joint operatorship and took strong exception to bg group chief executive Frank Chapman flying to India to elicit support on a commercial agreement from senior ministers, sources said.With RIL firmly backing it, the state-owned firm, which had originally discovered Panna-Mukta and Tapti field, threatened to remove BG as interim operator of the field if it did not agree to joint operatorship.BG, in December, proposed involving ONGC and RIL in award of multi-million dollar contracts including that for the proposed $800 million development plan to enhance output from the field and subseqent negotiations saw hammering of the agreement, sources said.BG, which took over interim operatorship of the fields after buying Enron’s 30 per cent stake in February last year, has also promised transparency and greater participation of Indian partners in decision making.ONGC is the largest shareholder in the field with 40 per cent stake while RIL has the remaining 30 per cent.The joint venture is loosing about Rs 1.5 crore a day by way of unrealised production potential.BG has maintained that joint operatorships have always been a non-starter and has delayed decision making process.
