New Delhi: The government will offer the bigger oil and gas blocks belonging to Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) to the private sector on relaxed conditions. Around 56 of ONGC's and OIL's smaller contract areas have been auctioned to private companies under the two rounds of discovered small fields in recent years.

"For production enhancement, bringing new technology, and capital, national oil companies will be allowed to induct private sector partners,"

"To enhance production from existing nomination fields of ONGC and OIL, enhanced production profile will be prepared by both PSUs. For production enhancement, bringing new technology, and capital, national oil companies will be allowed to induct private sector partners," a government release said.

64-65 blocks expected to be bid

Atop official said ONGC and OIL would conduct the bidding themselves, although Finance Minister Arun Jaitley did not provide details of the blocks planned to be auctioned. "Some 97 blocks were initially identified, but the final number could be around 64-65," the official said.

Marketing and pricing freedom has been granted to those new gas discoveries where field development plan (FDP) is not yet allowed, in order to incentivise enhanced gas production. However, the notified gas price and ceiling fixed by the ministry of petroleum every six months would not be applicable to production from these fields. Earlier, the exemption was just applicable to "new discoveries".

Terms suggested by NITI aayog panel on oil and gas

The terms have been suggested by a Niti Aayog panel, Jaitley says. Amitabh Kant, the CEO of the policy think tank of the government, headed the committee to suggest steps for boosting domestic production. Petroleum Minister Dharmendra Pradhan was not present in the Cabinet meeting that gave the new policy approval.