The Petroleum Ministry plans to offer up to 149 of Oil & Natural Gas Corporation’s discovered “small and marginal fields” to private companies and induct exploration technology giants in a few of the national explorer’s bigger fields.
At a meeting with Prime Minister Narendra Modi on October 12, the Ministry made a presentation showing that while 95 per cent of ONGC’s production was from 60 large fields, 149 smaller fields contributed to a mere five per cent.
It suggested that these smaller fields could be handed over to private firms letting the state-run explorer concentrate on the big ones where it could rope in technology partners through production enhancement contracts (PEC) or technical service arrangements.
After the meeting, a six-member committee under Niti Aayog CEO Amitabh Kant was set up and given time until November 10 to come up with a firm plan after consulting all stakeholders.
Others who attended this meeting were Finance Minister Arun Jaitley; Petroleum Minister Dharmendra Pradhan; ONGC chairman and managing director Shashi Shanker; Oil India Ltd (OIL) CMD Utpal Bora and Petroleum Secretary M M Kutty.
Sources said other members of the committee are Cabinet Secretary P K Sinha; Aayog vice chairman Rajiv Kumar; Kutty; Director General of Directorate General of Hydrocarbons V P Joy and Shanker.
The Ministry has, subsequently, circulated a working paper for these members suggesting an outright sale of small fields discovered by ONGC in exploration areas that were given on nomination to it; ONGC entering into agreements for larger fields and ONGC creating a subsidiary of its technical services wing.
Last October, the then DGH Atanu Chakraborty had identified 15 producing fields – with collective reserve of 791.2 million tonnes of crude oil and 333.46 billion cubic metres of gas – of national oil companies for handing over to private firms in the hope they would improve upon the baseline estimate and its extraction.
But the process got stalled after ONGC countered the DGH proposal for auctioning these fields to private firms saying it should also be allowed to participate in the auction and get the same concessions offered to private bidders.
The DGH had also identified 44 fields of ONGC and OIL which could take on partners for production enhancement work where bidders would get the “tariff” that they bid as a return for increasing the output “over the baseline production” for an initial period of 10 years.
ONGC is currently cash-strapped as it had to buy out Hindustan Petroleum Corp and bail out Gujarat State Petroleum Corp in fiscal 2017-18.
In August 2017, it acquired 80 per cent stake in GSPC’s KG basin gas block for Rs 7,738 crore followed by purchase of the central government’s entire 51.11 per cent stake in oil refining and marketing company HPCL for Rs 36,915 crore.