Essar Oil has agreed to the government condition of not raising any funds against the Ratna and R-series oil fields for its refinery project, so as to expedite signing of the long-delayed contract for the field.

Essar Oil, which was awarded the fields in 1995, will provide a letter to the ICICI "to the effect that the Ratna R-Series field will not be pledged as a security for the loans taken against the refinery project," informed sources said in New Delhi on Thursday.

The company has also given an undertaking that it would not sell its stake in the field till the development plan stipulated in the production sharing contract is achieved or for a period of 3 years, whichever is later.

The government had in April asked Essar to free the Ratna and R-Series fields within three months from loans it had taken from banks and financial institutions for construction of its trouble-torn refinery in Gujarat by pledging the receivables from the fields as collateral.

Senior Essar Group officials last week met the Petroleum Minister Ram Naik to expedite signing of the contract for the fields. Following this, Essar wrote to Naik stating that the company shall establish a bank guarantee for the minimum investment committed in the field from the date of signing.

Sources said Essar wants to start the development of the field at the earliest so that it is ready to deliver crude to meet the requirement of its 10.5 million tonne refinery, which would be in operation by early 2005.

Essar Oil has 50 per cent interest in the oil fields while the state-owned Oil and Natural Gas Corporation has 40 per cent. The remaining is with Premier Oil Plc of UK.

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