COMMENTARY
INTERVIEW
SPECIALS
CHAT
ARCHIVES

BJP demands probe leasing of oil fields to private firms

The Bharatiya Janata Party on Friday demanded a Central Bureau of Investigation inquiry into leasing of oil fields to private companies, resulting in a loss of more than Rs 200 billion to the national exchequer.

The party also demanded reassessment of oil reserves in all fields leased to private companies, with an examination of the bidding process adopted. Party spokesperson Yashwant Sinha also wanted to know how permission was granted to officials in government and government-owned companies to join privately-owned companies in fields related to their old work, despite rules that forbid such moves for a fixed period.

Sinha said the oil field scam, brought out by the Comptroller and Auditor General of India, had revealed how the Panna and Mukta oil fields were leased to the Reliance- Enron joint venture company in ''utter disregard of all financial norms''.

He said it was surprising that all private companies which had been given exploration oil fields -- Panna, Mukta, Revva, Kharsang, Ratna and series oil fields -- had foreign collaboration.

The inquiry should take into consideration all aspects, including pricing of oil, cost-sharing, and actual current production, he said.

According to the CAG report, confidential data from the government-owned Oil and Natural Gas Commission showed oil reserves of 32.13 million tonnes in Panna and 22.12 million tonnes in Mukta -- totalling 54.25 million tonnes, Sinha, a former Union finance minister, said.

But when the petroleum ministry invited bids for production, the reserves in these two fields were pegged at 16.41 million tonnes and 14.94 million tonnes respectively, a total of just 31.35 million tonnes. A difference, Sinha pointed out, of 22.90 million tonnes. Besides the final oil reserves showed a further evaporation of 17.35 million tonnes, he added.

He said the missing 17.35 million tonnes of oil would mean a loss of Rs 89.25 billion to the exchequer -- at a crude oil price of $ 20 a barrel. If costs were calculated on the basis of the original estimate -- 54.25 million tonnes -- the exchequer would lose more than Rs 200 billion, he said.

Sinha said it was strange that while the government offered the ONGC just Rs 1,741 per tonne, the private companies were offered international prices at about Rs 4,545 a tonne. Why was ONGC, which discovered these fields and started production, given a lower price while the ones which came in later and did not have to pay for exploration and development of the field were offered a higher price.

He said the government was talking of increasing the prices of petrol and petroleum products because the oil pool deficit was Rs 155 billion. But it was not bothered about the loss in billions of rupees caused by handing over of these oil fields to private firms. Therefore, the BJP was opposed to effecting any increase in prices of petroleum products, he asserted.