An Essar Oil-led consortium has got the go-ahead for Ratna and R-series oilfields in Mumbai offshore with all the ministries concerned clearing the award of fields to the company.

The fields estimated to hold recoverable crude reserves of 100 million barrels were awarded to the Ruias-owned Essar in 1995 but a contract could not be signed owing to doubts about the company's financial capability.

Essar Oil has agreed to the government condition of not assigning or transferring its participating interest or exiting the contract until development plan is achieved or for a period of three years, whichever is later. It will also furnish a bank guarantee in the first year based on the annual expenditure it committed in its bid. "The contract would be signed once Essar Oil resubmits the undertaking," said an official.

The negotiating team of secretaries (NTS), constituted for sorting out the issue, gave the green signal at a meeting on Tuesday. The Essar Oil-led consortium will take over development of the fields which are adjacent to the Mumbai High.

Essar Oil has 50% interest in the fields while public sector Oil and Natural Gas Corporation (ONGC) holds 40%. The remaining stake is with Premier Oil Plc of UK.

The NTS asked the consortium members to pay ONGC for maintenance and upkeep of the oilfields since 1995.

Essar had earlier withdrawn all charges on Ratna and R-series oilfields that were created for raising funds for its Vadinar refinery. It also agreed to government condition that it would not divert crude oil from the fields to its refinery in Gujarat and all the crude produced would be routed to BPCL.

Sources said the finance ministry earlier wanted the fields to be reverted to ONGC but later gave no objection to NTS for their award to Essar.

Ratna and R-series oilfields are a series of discovered fields situated south of Mumbai High basin with a proven in-place reserve of around 500 million barrels of oil.

Essar's share of investment in developing the field is anticipated at $149.09 million.

NTS had earlier asked the directorate general of hydrocarbons to investigate Essar Oil's financial status between the time its bid for the field was accepted and now.