New Delhi: Oil and Natural Gas Corporation (ONGC) alleged in the Delhi high court on Wednesday that Cairn may be colluding with Videocon Industries in a case involving the Ravva oil field in which the three companies, and Ravva oil are partners.
Cairn India Ltd moved the Delhi high court last week seeking a refund of costs it had paid on behalf of Videocon Industries Ltd for operation of the Ravva oil field in the Krishna-Godavari (KG) basin in Andhra Pradesh.
“Cairn is not pressing for any relief against Videocon who happens to be the prime defaulter. Only public sector undertakings like ONGC are being targeted.” Tushar Mehta, appearing for ONGC submitted.
Cairn emphasized its position that in the case of a default by a partner, other non-faulting partners had to pay the defaulter’s share pro-rata.
The dispute arose out of a default by Videocon over the years in making payment towards operating costs of the oil field under a production sharing contract (PSC) with Cairn, the operator of the oil and gas field.
The Ravva oil and gas field is being developed by Cairn India, which has a 22.5% participating interest, Oil and Natural Gas Corp. (40%) and Videocon and Ravva Oil, with 25% and 12.5% interest, respectively. The production sharing contract under which the oil field is being developed by the four companies is valid until 2019.
Cairn had submitted before the court that ONGC and Ravva oil had failed to respond to cash calls by Cairn and could not shy away from sharing the burden due to default on Videocon’s part.
Arguments by Videocon will begin on 15 September.