Oil firm Oilex has been sued by one of its investors over the Australian firm's failure to disclose default by Gujarat government firm GSPC in paying its share of expenses in the Cambay oil and gas block.
Zeta Resources filed a case in the Federal Court of Australia, claiming that Oilex failed to disclose that its Indian JV partner Gujarat State Petroleum Corp has been in default in paying cash calls, the Australian firm said. The investor claims it would not have agreed to make the investments in Oilex had it known the position of the partner. In its legal proceedings, Zeta seeks an order for the funding pact to be void and seeks damages and compensation from Oilex.
"The proceedings have not yet been formally served on Oilex although Oilex has received from Zeta copies of the documents, which Zeta asserts have been filed in the court," it said. "Zeta has alleged that the firm has failed to disclose material information to it prior to its initial investment and has contravened statutory provisions relating to misleading or deceptive conduct and continuous disclosure and rights issue disclosure requirements." Oilex said the charges are "without merit and it will vigorously defend it". "The board of Oilex is considering the full implications and options to progress the development of the Cambay field, as a consequence of Zeta failing to settle the subscription of convertible notes," it said.
Oilex, which holds 45 per cent interest in the Cambay field in Gujarat, is unable to carry out its committed work of drilling two wells this fiscal after GSPC refused to fund its 55 per cent of the $38 million budget. The programme, approved by a DGH-headed oversight panel, would help open up the onshore Cambay basin that the US-based EIA estimates to hold a in-place resource of 30 trillion cubic feet of gas and 2.7 billion barrels of oil.