Nagaland Cabinet has reportedly approved issuing licenses to oil companies (Cos) which include Metropolitan Oil and Gas Pvt Ltd (MOGPL). MOGPL has been allotted Wokha and Peren zones. The decision was taken during a cabinet meeting held Thursday. Highly placed sources told Nagaland Post about the decision and also informed that the license was likely to be issued within a week’s time. The sources also said that there were other companies which have been approved by the cabinet but declined to disclose the names.
It may be mentioned that there were reportedly 23 bidders for the Expression of Interest (EoI) floated in national dailies after which the Gas Board (the second in the three-tier structure) opened the bids on January 10, 2013 ahead of the February 23, 2013 assembly election. It was reported that the list was then narrowed down to five only.
Sources had informed Nagaland Post earlier that the companies whose names were doing the rounds included Assam Company India Ltd; Prize Petroleum Ltd; Deep Industries Ltd. and Shivani Oil & Gas Exploration Ltd. and Jubilant Oil & Gas Exploration Pvt. Ltd.
The cabinet nod to MOGPL however is likely to draw a lot of flak from many quarters.
According to documents available with this Correspondent, MOGPL on the opening of the Expression of Interest (EoI) dated January 10, 2013, had claimed that its promoters had vast international experience in petroleum exploration and refining business with projects in Congo in bitumen and other African countries. It also claimed that M/S Cals Refineries Ltd; M/S SRM Exploration Pvt Ltd; M/S Spice Energy Ltd; Rastogis (individuals) were shareholders of MOGPL.
Upon a preliminary investigation, it was found out that M/S Cals Refineries Ltd; M/S SRM Exploration Pvt Ltd and M/S MOGPL all shared a common address: 21, Basant Lok Complex, Vasant Vihar, New Delhi. It was also found out that M/S Cals Refineries Ltd and M/S MOGPL had a common director: Sameer Rajpal.
The documents also pointed out that SRM Exploration Pvt Ltd has been under court litigations. A Delhi High Court judgment in March 2012, against a winding up petition filed by a Czech company, said SRM Exploration has been “wound up and debarred from selling or disposing their assets both movable and immovable. Claim made on SRM Exploration were for Rs. 70 crores. There were also three different court litigations against M/S SRM Exploration.
With regard to M/S Cals Refineries Ltd, the Securities and Exchange Board of India (SEBI) found out that the company had allegedly indulged in gross misconduct and fraudulent enriching of their promoters through issue of global depository receipts to the tune of USD 200 MM while falsely declaring payments shown as advance to suppliers of refinery equipments. Security Appellate Tribunal (SAT) had banned the company from issuing of equity to investors through any instrument for a period of 10 years.
Despite the background of the company, there were also other implications why approving license for M/S MOGPL on oil business in Nagaland would be a problem. For instance, in Wokha district, the Changpang oil field, the only producing field, required huge funding to review and restore the field to achieve sufficient production and indicate further potentials in the entire Wokha zone. Being incapable of refunding the payments received by M/S SRM Exploration and M/S Cals Refineries raised by them in the past and now involved in court litigations, one possible way for M/S MOGPL was to raise fund was to operate the oil field and carry out exploration in other areas within Wokha and Peren through “third party rights, with or without the consent” of the state government, said one of the documents.
There are chances of faster recovery of oil from the zone allotted risking permanent damage as the primary objective of the company would be to pay back previous creditors of M/S SRM and M/S Cals Refineries.
The documents also quoted sources stating that there was a strong possibility of M/S MOGPL to be sold out by the current promoters to raise funds for repayment of loans and refund of equity after SEBI’s ban and unfavorable court judgments against the promoters of M/S MOGPL.
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