Director-General Hydrocarbons V K Sibal has lodged a complaint with the Securities and Exchange Board of India against Oil and Natural Gas Corporation for making public an oil discovery without informing the stock exchanges. Sibal has sought an investigation into the matter.
Sibal's move and a letter by Sebi Chairman M Damodaran to Petroleum Secretary SC Tripathi, saying there is no mechanism to determine if an announcement is premature or does not comply with the disclosure clause of the listing agreement, come around the same time. Sebi has proposed that the petroleum ministry put in place a mechanism for the purpose.
Fight club: Minister vs PSU honcho
Sibal's letter is the latest salvo in his ongoing spat with ONGC Chairman Subir Raha. Raha has opposed Sibal's appointment on the ONGC board saying that the Directorate-General of Hydrocarbons was a regulator. Subsequently, Sibal raised the issue of the company announcing a gas find without informing his office.
Pointing to Sibal's outbursts in the media regarding premature disclosure of discoveries by ONGC and Gujarat State Petroleum Corporation, the Sebi chairman's letter said, "No communication has been received from DGH, regarding any development that merits action by Sebi.... If the director-general is of the view that an act or omission has taken place, meriting Sebi's attention, it will be appropriate for him to write to Sebi rather than to have Sebi learn of his views through television channels."
"Sebi action has been sought on ONGC's announcement of a discovery of a 6 trillion cubic feet gas discovery," said an official adding that the letter from the DGH was dispatched last week within days of Sebi writing to the petroleum ministry.
Sibal, in his letter, has referred to his earlier communication that had sought a meeting with the market regulator to discuss guidelines for announcing new oil and gas discoveries and in-place reserves by any exploration company in India.
The letter has also quoted Clause 10 of the production sharing contract which states, "If and when a discovery is made with a contract area, the contractor shall inform the management committee (of the PSC) and the government of India of the discovery."
Citing the case of ONGC, Sibal's letter said, "At the time of the announcement, the well was still an open-hole well and was under evaluation through wireline logging to know the presence of hydrocarbons in the well, which only gives indicative presence of hydrocarbons."
| War of words |