The committee of secretaries reviewed the case, after doubts were raised about the Essar group's financial health, for taking up 50 per cent stake in the oilfield in Ratnagiri, official sources said on Sunday. "The committee feels that there are enough safeguards in the agreement, for the field to meet any eventuality. Although finances of a participating company are important, the money for investment in such ventures is usually raised by participants, on the basis of established recoverable reserves," they said.

Essar Group is also seeking to recommence work on its 10 million refinery project at Vadinar in Gujarat, for which it is trying to get clearance for fund disbursals from financial institutions. When contacted, Essar spokesperson said from Mumbai, that the production sharing contract with the government for the "R-series" field will be signed shortly after completion of the required documents. While ONGC has 40 per cent stake in the oilfield, awarded to the consortium in 1996, the premier oil company is the operator for the field, with the remaining 10 per cent stake. The Centre had signed production sharing contracts for nine other oilfields yesterday, for which contracts were awarded in 1996 to various consortia along with that of Essar. Investment banker ICICI, commissioned to assess Essar's financial ability to venture into upstream oil and gas exploration, gave the green signal to the company's foray, saying financial institutions had little problem in financing Essar's investment plans against future oiland gas receivables.

Government sources said, that the agreement for the contract for these oilfields provides for exiting of a defaulter from a consortium, after other partners give due notice to the defaulting partner. The consortium is expected to record an annual turnover of Rs 1,000 crore once the production commences, from the field where essar is expected to pump in $150 million as its share of investment, sources said. ONGC, which had originally developed the field, has already acquired more than 4,000 lkm of 2-D seismic data and 8,000 lkm of 3-D seismic data and more than 30 wells have been drilled in and around the area.

(PTI)