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Jul 12, 2012, 08.23 AM IST
The oil ministry has told the Prime Ministers Office that there will be an exodus of foreign companies coupled with possible arbitration, and damage claims against the government if E&P blocks are not given all the requisite statutory approvals, reports CNBC-TV18.
According to our sources, the oil ministry has told the PMO that one of the big areas of concern is the lack of statutory clearances, which is impacting E&P activity in the country.
In the past out of the 194 blocks that are under operation 79 of these blocks were impacted due to the lack of clearances. Right now 46 blocks amounting to USD 12 billion are impacted as they do not have clearances from the Ministry of Defence, the Air force, Navy and DRDO.
The oil ministry wants the Prime Minister's intervention for this issue. They also said that if this issue is not clarified we could see a series of arbitrations, litigations against the government, operators asking for damage claims.
The oil ministry has also asked for streamlining the entire clearances process. For example, the Ministry of Environment and Forest should not have to give a clearance each time. There should be one-time clearance which it gives at the beginning to be valid till the end of production.
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