Page 6 - AsianOil Week 37

AsianOil SOUTH ASIA AsianOil

India loses long-running

battle over Ravva field costs

PROJECTS & INDIA’S privately owned Vedanta and Vid-
COMPANIES eocon Industries have scored a major victory
in their long-running dispute with the Indian
government over the shallow-water Ravva oil
and gas field.
The Supreme Court ruled last week that a
Malaysia arbitration tribunal’s decision in 2011
to award the partners $476mn in cost recoveries
related to Ravva’s development was sound. The government contends that the arbitration
The judgement, handed down on Septem- panel overstepped its remit in deciding to ignore
ber 16, brings to end New Delhi’s battle to the cost cap of the contract, a view not shared by
have the arbitration ruling overturned, which either the Malaysian or Indian judiciary.
has also seen it approach the Malaysian High India’s Supreme Court said: “The interpre-
Court, Malaysia’s Court of Appeal and India’s tation of the terms of the PSC lies within the
High Court. domain of the tribunal. It is not open for the
The Indian government argues that under appellants to impeach the award on merits
the original production-sharing contract (PSC) before the enforcement court. The enforcement
signed in 1994, the partners are only entitled to court cannot re-assess or re-appreciate the evi-
$198mn in cost recoveries. dence led in the arbitration.”
It claims the original PSC signed with Cairn The court dismissed the government’s argu-
India (now Vedanta) allowed for the drilling of ment that PSCs are “special contracts” pertaining
21 wells at a capped cost of $188.98mn plus to government policy and are sacrosanct.
5%. With 14 of those wells drilled before the The Supreme Court said: “We are of the view
contract was revised in 1999 and the other that the disputes raised by the claimants emanate
seven drilled in the years by 2007-2008, New from the rights and obligations of the parties
Delhi argues that capped pricing applies to all under the PSC.”
of the work carried out. It added the award was not contrary to the
Vedanta’s lawyers argued that the company’s fundamental policy of Indian law, and that the
exploration costs ballooned after it signed the tribunal’s interpretation was “a plausible view,
revised contract, beyond levels provisioned for and the challenge on this ground cannot be sus-
in either the original PSC or its revised format. tained, to refuse enforcement of the award.”™

SOUTHEAST ASIA

Indonesia confident over

2030 production target

POLICY THE Indonesian government remains confident the minister said 68 of the country’s 128 basins
that it can still achieve its target of producing were undeveloped.
1mn barrels per day (bpd) of oil by 2030, despite Tasrif, however, acknowledged that both
the ongoing challenges that the coronavirus the country’s oil and gas lifting and its energy
(COVID-19) pandemic has created. demand had declined as a result of the health
Indonesian Energy Minister Arifin Tasrif said crisis. The minister decided at the start of this
the government was working on a long-term month to postpone the auction of 12 exploration
strategy to gather high-quality survey data in blocks until 2021 in response to the COVID-19.
order to win over potential investors. “We have to take precautionary measures
“We have a long-term programme to realise against likely rescheduling for the auction of 12
the production target, our lifting target. We have new working areas, owing to declining business
targeted oil production at 1mn barrels per day attraction and decreasing oil prices. Hence we
by 2030,” Antarra quoted Tasrif as saying on Sep- need some adjustment in investment,” he said
tember 17. Highlighting the country’s potential, this week.

P6 www. NEWSBASE .com Week 37 17•September•2020