ONGC pays Trinidad and Tobago $ 30 mm bonus to explore for oil

ONGC Mittal Energy Ltd (OMEL) has paid the Government a record $ 30 mm (TT$ 190 mm) signing bonus to explore for oil and natural gas reserves in one of this nation's offshore blocks, before it has even begun any drilling.
OMEL paid the record signing bonus after receiving the award of the 98,669.383-hectare Block North Coast Marine Area (NCMA) that had been put out for bid three years ago. OMEL won the contract after submitting a $ 204 mm bid.

OMEL is a joint venture between the India-based Oil and Natural Gas Corporation (ONGC) and Mittal Investment, and will be carrying out exploration for oil and gas reserves in NCMA through its local subsidiary, OMEL Energy T&T Ltd, in a joint venture arrangement with the State-owned oil refining and exploration company Petrotrin.
OMEL Energy T&T chief operating officer PH Mane told the company paid what could be the largest production-sharing bonus in this country's history because it is confident the investment will pay off, since NCMA is surrounded by productive gas fields such as Hibiscus, Chaconia, Ixora and Poinsettia, that are now being developed by British Gas.
"It is proved, it is established... We are quite hopeful that we have a good bit of chances there," Mane said.

He did so after OMEL Energy T&T signed the Production Sharing Contract (PSC) with Energy Minister Conrad Enill during a ceremony at the Hyatt Regency Trinidad hotel in Port of Spain. Those in attendance included Energy Ministry Permanent Secretary Leroy Mayers, India High Commission Charge d'Affairs Raj Chawla, acting Commissioner of State Lands Salisha Ali-Bellamy, Petrotrin executive chairman Dr Malcom Jones, and ONGC Mittal chief executive officer Ver Ravindranath.
Ravindranath told after the event that the existing low oil prices did impact the negotiations for NCMA.
"Obviously, if oil prices are lower, the bids are lowered. The rate for contract development costs would be less. It is purely market-driven economics," he said.

Enill said the PSC OMEL Energy T&T has signed with the State was significant, given the fact that global oil prices and natural gas prices are on the decline and "as production costs decline and with reports of falling production levels in regions such as Russia, Mexico and the North Sea, there may be greater challenges for the sector to attract the required investment that is needed to sustain the sector".