UK’s upstream international oil and gas company, Hardy Oil and Gas, has threatened to abandon Puducherry’s PY-3 oilfield if the Indian government and field licensee, the Indian Oil and Natural Gas Corporation (ONGC) fail to honor the production sharing contract (PSC), reported Business Standard.
This comes as a result of the company’s unaddressed request for resuming production from the field, which was shut down in July 2011 due to the expiry of the production facilities’ marine classification. The decision by the Indian Oil Ministry has been pending for a year now and the terms the ministry recently approved for extending the field license have made the investment economically unviable.
The company said that its officials have met India’s Oil Minister, Dharmendra Pradhan, in May, to discuss a full field development plan (FFDP) that seems to be favoring the licensee of the block over the other three operators at the field that has produced over 24.8m barrels of high quality light crude oil before it was shut down.
The London-listed company was cited by The Economic Times saying: “The future of PY-3 is solely dependent on the Government of India and its nominee/licensee agreeing to honour the PSC in full. Well monitoring activity has been proposed and failing the timely adoption of FFDP and past budgets, planning for abandonment will be initiated.”
Hardy is one of the four operators that have control over production at the PY-3 oilfield. It owns the lowest share of 18% among its three other counterparts Tata Group, HOEC, and ONGC, that own 21%, 21%, and 40%, respectively.