Citing poor performance by autonomous national oil companies (NOC) ONGC and Oil India Ltd, the petroleum ministry has further tightened the screws on them by handing over approval of their exploration and development activities to the upstream technical arm Directorate General of Hydrocarbons (DGH).
A ministry’s order of August 2017 directs both NOCs to submit to the DGH all data relating to drilling activities for each petroleum exploration license (PEL) and petroleum mining license (PML) in fields given to them through nomination.
“NOCs shall also submit to DGH the details of recommended drilling locations along with detailed proposals of exploratory and development locations for approval and release by DGH,” it says with a footnote cautioning any violation to this directive.
“DGH will issue the approval letter indicating the released location coordinates to be drilled in PELs/PMLs along with the geological objective and target depth of each well. Wells drilled without prior approval and release of coordinates by DGH shall be considered as unauthorized,” says the footnote.
Besides, the NOCs will also have to submit “Annual Plan of Drilling Activities” to the DGH on or before April 30 of each financial year.
The August order is the latest control over NOCs which began with “Guidelines for management of Oil and Gas Resources for nomination fields of NOCs” on November 25 last year which made the Director General of DGH the chairman of newly-constituted Management Committees for each NOC.
The three-member panel — with one ministry official and the third, a director from the NOC — would review “petroleum operations and other decisions” by the NOC on nomination acreages.
In May this year, all-powerful review committees headed by DGH were announced to review annual work programme, budget, declaration of a discovery as commercial, reservoir and production performance, monitoring of development activities and collaborations with other private companies.
DGH followed it up with a June order asking NOCs to submit “at the end of each day, data relating to Daily Production for each field” as well as “provisional production data for the preceding month” and “Reconciled Monthly Production Data for each month”.
Through a July 11 order, it asked the NOCs for reservoir production and performance data on a half-yearly basis and in-place reserves in each of the fields on a yearly basis.
Besides seeking technical data on reservoir performance, it asked them to immediately notify any discovery and detailed timelines for subsequent processes like declaring a find commercially viable and submission of a field development plan or feasibility report. For previous discoveries, it asked for a quarterly status report.
The ministry claims it is intensifying monitoring of oil and gas fields held by NOCs to avoid slippages in domestic output derailing the target of cutting import reliance by 10 per cent by 2022.