Videocon Petroleum has earned a temporary reprieve from termination of its contract for Ravva oil and gas field, by agreeing to pay $15 million as part payment for the profit petroleum due to the government.
Petroleum ministry, which had issued a termination notice on Videocon for non-payment of Rs 290 crore (Rs 2.9 billion) and mortgage of Ravva assets, has accepted its proposal to deduct $15 million from the amount payable to it from sale of oil and gas produced from the field, highly placed sources said in New Delhi.
Accordingly, Hindustan Petroleum Corporation will deduct $11.9 million, Gail $1.09 million and Bongaigaon Refinery and Petrochemicals $2 million from the amount payable to Videocon Petroleum (now known as Petrocon India) for the oil and gas they buy from the field.
Besides, the three state-run firms will deduct $6 million every month, beginning from June, from Videocon's receivables -- HPCL $2 million, BRPL $3 million and Gail $1 million till all profit petroleum dues are cleared.
Sources said Videocon had not made any payment of profit petroleum -- government's share in the revenue from oil field once the developer has paid off the loans and other such obligations towards development and commercialisation of the field -- ever since the field entered PP phase over two years ago.
The company had disputed both the amount to be paid as well as the time-frame for payment.
The government was also upset at Videocon allegedly executing a Rs 990 crore (Rs 9.9 billion) debenture trust deed by mortgaging its Ravva assets without prior sanction.