After parliamentary panel flags limited CBG progress, state oil firms cancel 87 LoIs

New Delhi: State-run oil and gas companies have cancelled letters of Intent (LoIs) issued to 87 “non-serious candidates” for procuring compressed biogas (CBG) after a parliamentary panel recommended the review of LoIs, citing limited progress in building CBG plants.

Oil and gas companies issue LoIs to entrepreneurs to procure CBG from them. The entrepreneurs use the LoI to receive regulatory clearances and loans for their CBG projects. After the standing committee on petroleum and natural flagged the issue of LoIs, the oil ministry advised state-run oil and gas companies to review the selection criteria for LoI issuance “so that only serious applicants are selected and also to withdraw the LoIs issued to non-performing entrepreneurs,” the committee said in its latest report.