The Comptroller and Auditor General (CAG) of India estimates that delays hitting the development of the Ratna and R-Series fields have kept proven oil and gas reserves worth Rs 26,500 crore (US$4bn) idling for nearly two decades.
Oil production from the two fields, located about 130 km off the Mumbai coast, stopped in 1994 after a decade of operation, when the Indian government decided to hand over operations from Oil and Natural Gas Corporation (ONGC) to a private company. A consortium of private investors led by Essar Oil was awarded the development in 1996 but the final decision on entering the production sharing contract (PSC) for the field still remains to be taken by the government. According to the CAG, the deferment of local production of crude oil and gas from the fields from October 2005 to March 2015 amounted to Rs 26,200 crore (US$3.95bn) and the government lost Rs 1,105 crore (US$167m) in royalties and taxes. The idling and non-maintenance of existing facilities will result in an avoidable financial burden of Rs 1,086 crore (US$164m) on redevelopment of the field.
The CAG is thus urging the Indian government to take a decision on the project quickly.