Govt clarifies: ONGC free to choose any model for increasing oil & gas production

  • ‘ONGC has to prepare its plan and take right decisions in order to increase domestic production’
  • ‘There is enough scope for several large and small companies to operate in the offshore and onshore basins in the country as substantial area is still available’

New Delhi: With an intention to put to rest a flurry of speculations over what the government wants Oil & Natural Gas Corporation (ONGC) to do, the Central government has released an official statement, saying that it wants ONGC to increase its oil and gas production by any means possible, whether by bringing in new technology or involving private sector companies. It has also clarified that the responsibility of taking a decision to meet that objective rests with ONGC. 

The statement comes after weeks of speculation triggered by a letter shared in the public domain by the second senior-most bureaucrat of the Ministry of Petroleum and Natural Gas on October 28. In the letter, Joint Secretary Amar Nath had urged ONGC to offer 60 percent stake in Mumbai High, Bassein and Satellite fields to international partners to increase production from these fields. It was followed by rumours of ONGC offering its prominent fields to private sector through Expression of Interest (EoI), a news which was dismissed by ONGC on November 19. And then another letter written by ONGC’s officers’ union to Petroleum Minister Hardeep Singh Puri came to light, in which the PSU’s officers voiced their resistance against the government’s plan and demanded a level playing field like the private sector.

‘ONGC free to choose any model for increasing production’

Taking congnisance of all these media reports, the Ministry of Petroleum and Natural Gas said, “Ministry of Petroleum and Natural Gas will like to clarify that ONGC had conducted an internal Strategy Meet at Udaipur from 29th to 31st October 2021 for which suggestions including making a 25 years energy perspective plan, 15 years exploration plan by taking more acreages under exploration, and having partnerships for its major fields, with scope of enhancing recovery and technology infusion, were made.”

It went on to add, “The Government had decided in February 2019 that National Oil Companies (NOCs) would be free to choose field specific models including farm out and Joint Venture (JV)/ Technical Service Model (TSM) for enhancing production from their mature and ageing fields.”

Govt keen that domestic oil & gas production increase exponentially

While asserting that the government is keen that the domestic production of oil and gas should increase exponentially, the ministry said, “ONGC, being the leading organisation, has to play an important role.” 

“While on one side, area under exploration has to be increased which would subsequently lead to more new discoveries in the country. On the other side, production from existing fields has also to be optimised and increased wherever possible by employing advanced technology, drilling more production wells, wherever technically feasible, and better management,” said the ministry.

For this, the ministry has suggested that private sector companies can be involved as partners or through various business models so that new techniques and technology can be brought in through such companies which have experience in this. “However, all this has to be done by following system and procedures in a transparent manner. ONGC has to prepare its plan and take right decisions in order to increase domestic production. There is enough scope for several large and small companies to operate in the offshore and onshore basins in the country as substantial area is still available,” the ministry said.

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