ISLAMABAD (May 09 2007): A local oil and gas company, M/s OPI Inc has charge-sheeted Oil and Gas Development Company (OGDC) for causing financial loss to the joint venture partners (JVPs) by delaying development of Sinjhoro block and offered to take over its operatorship for bringing the ordeal to an end.

An OPI Inc letter addressed to the JVPs said, "We would like to bring to your notice that development of Sinjhoro block field has been delayed for an indefinite period, which caused colossal loss to the joint venture partners.

The letter said Sinjhoro Block was assigned by OPII to OGDCL on December 29, 1999, retaining 19 percent working interest and actual exploratory work as per work program started on December 21, 2001. It claimed that Sinjhoro joint venture (OGDCL 76 OPII 19 and GHPL 5 percent) has drilled 19 wells out of which 14 turned out productive.

It added that joint venture spent over $77.0 million on exploration-appraisal program for which OPII contributed over $15.4 million. The letter indicated that in technical committee meeting. Operator committee meeting (TCM/OCM) held on December 19, 2005, joint venture partners approved Sinjhoro fields' development concept whereby Sinjhoro gas and condensate was to be transported to Bobi for processing.

It maintained that Sinjhoro development project was to be executed within 15 months from the date of approval but its development activity could not even take off.

As per PCA/JOA, a TCM/OCM it is mandatory to hold such meetings at least once every quarter whereas the operator did not conducted any TCM/OCM during 2006 or the first quarter of 2007 despite repeated reminders. The OPII claimed that JVPs have been constantly demanding of the operator to make progress on the field development but of no use.

It maintained that OPII understands that OGDC is in litigation with the field development contractor, who was in the first place chosen without obtaining JVP's prior approval as provided for under the JCA/JOA. It said keeping in view litigation case OPII offer to take over operatorship of Sinjhoro field. It maintained that OPII, as one of the joint venture partners, could take on development of the Sinjhoro field on a fast track basis.

Sources said that the JVPs are meeting here on May 10 to consider the OPII proposal for change of operatorship. In the case of acceptance of the OPII proposal the JVP will be required to submit it to the Director General Petroleum Concession (DGPC) for the change of the operatorship.

Copyright Business Recorder, 2007