Saturday, August 28, 2010

Canoro's PSC Terminated.

In what is being seen as a veiled threat to the Cairn-Vedanta deal, the Petroleum Ministry has, for the first time, terminated a production sharing contract (PSC) with an oil and gas producer for allegedly violating disclosure norms. Not just that, it has cited “national interests and government’s sovereign power on the national resources” as a reason.

The ministry today issued the PSC termination order to Canadian explorer Canoro Resources Ltd (CRL) for the discovered Amguri field in Assam saying it had violated PSC Article 29.2 by not seeking the government’s consent before making a “material change” in the shareholding of the company.

The order says that the “contract will stand terminated upon expiry of 90 days from the date of this ministry’s letter dated June 1, 2010, that is, August 29, 2010”.

CRL owned 60 per cent and is the block operator with Assam Company India Ltd holding the balance 40 per cent.


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