The oil ministry has asked ONGC to sell the oil field; Drilling off, other services

New Delhi The Ministry of Petroleum has asked ONGC, India’s largest oil and gas producer, to sell its stake in oil fields such as Ratna R-Series to private companies, acquire foreign partners in KG Basin Gas, monitor existing infrastructure, and shut down drilling and transfer services to others. .

On April 1, Amar Nath, Additional Secretary (Investigation) in the Ministry of Petroleum and Natural Gas, wrote a letter to Subhash Kumar, Chairman and Managing Director, Oil and Natural Gas Corporation (ONGC) with a seven-point action plan called ‘ONGC Way Forward’. This will help the company to increase gas production by one third.

The action plan, reviewed by PTI, calls on ONGC to consider privatizing or ‘privatizing’ coastal areas like emeralds and gems and R-Series and Gandhara in Gujarat to private companies.

ONGC wants to bring players from around the world to the gas-rich block KG-DWN-96/2 where output is expected to grow rapidly in the coming year, and recently to be produced in the Ashoknagar block in West Bengal. Also identified was the Deendayal block of KG Basin which the company had bought a few years back from GSPC, a government agency in Gujarat.

The ministry wants the agency to look into creating separate entities for drilling, well services, logging, workover services and data processing entities.

This is the third attempt by the ONGC power ministry to privatize the oil and gas fields under the Modi government.

In October 2011, the Director General of Hydrocarbons, the technical arm of the Ministry, identified 15 production sites with a combined reserve of 91.2 million tonnes of crude oil and 333.46 billion cubic meters of gas to be handed over to private companies in this hope. Baseline will improve on estimation and its extraction.

A year later, about 149 small and marginal areas of ONGC were identified for private and foreign companies on the grounds that the state-owned company should focus only on large areas.

The first plan could not go through due to strong opposition from ONGC, informed sources said.

The second plan went to the Cabinet, which on February 19, 2018, decided to bid for 644 marginal areas of ONGC. However, the tender received an interesting response, stating that ONGC was allowed to hold 49 cases on the condition that their performance would be strictly monitored for three years.

The April 1, 2021 ministry note said two years had passed since the cabinet decision and the non-performance areas were identified for transfer and privatization.

It offers market-friendly bid terms such as low royalty rates and complete marketing and pricing freedom.

For the medium-sized manufacturing sector, the action plan wanted ONGC to identify areas such as Panja-Mukta, Ratna and R-Series West Coast and suppression on Gandhara and West Coast of Gujarat, such as upcoming development plans, for partner sales.

It wanted to consider developing new business models to monetize stuck assets / discoveries, such as ONGC design, finance, built and operate, as well as annuities for development and securitization-based models. The document shows that fields like GK-28/42 and all unforgettable discoveries were identified individually or as a bouquet, as shown in the document.

The note said that to reduce dependence on crude oil and gas imports, the ministry has set a domestic production target of 40 million tonnes of crude oil and 50 billion cubic meters (BCM) of natural gas locally by 2022-24. The target for 2022-24 is expected to come from ONGC, which is expected to contribute per cent of GDP (20 million tonnes of oil and 35 BCM gas by 2022-24).

It said ONGC’s contribution to the country’s oil and gas consumption has been steadily declining due to prolonged stagnation or decline in production. As a result, import dependence is increasing.

ONGC produced 20.2 million tonnes of crude oil in the fiscal year ended March 31 (2020-21), up 20.6 million tonnes from the previous year and 201-19-1. In the year was 21.1 million tons.

It produced 21.87 BCM of gas in 2020-21, up from 23.74 BCM in the previous year and 24.67 BCM in 2018-19.

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