Friday, September 30, 2022

Govt sets the ball rolling on its plan to sell off 149 OIL, ONGC fields

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New Delhi: The government is planning to auction off as many as 149 small and marginal oil and gas fields of state-owned oil public sector undertakings (PSUs) — Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL) — to private and foreign companies to boost domestic output. And to set the ball rolling, it has constituted a six-member committee headed by NITI Aayog Vice Chairman Rajiv Kumar.

Who’s on the panel?

The other members on the panel include Cabinet Secretary PK Sinha, Economic Affairs Secretary Subhash Chandra Garg, Oil Secretary MM Kutty, NITI Aayog CEO Amitabh Kant and ONGC Chairman and Managing Director (CMD) Shashi Shanker.

The objective is to improve domestic production

According to sources, the setting up of the committee is a follow-up of the October 12 meeting where Prime Minister Narendra Modi had reviewed domestic production profile of oil and gas and the roadmap for cutting down India’s dependence on oil imports by 10 percent by 2022. The meeting saw the Oil Ministry listing down 149 smaller fields of OIL, ONGC and other explorers that contributed just 5 percent of the total crude oil produced in India. Sources said the ministry was of the view that ONGC should concentrate on the large fields as they contribute to 95 per cent of its production and leave out the rest for private firms.

What’s next?

The plan is to hold some kind of extended version of the Discovered Small Field (DSF) bid round where discovered and oil-producing fields of ONGC will be sold off to firms that are able to promise the maximum share of output to the government, sources said. The six-member panel has begun consultations with the stakeholders on the possible options, they said.

ONGC seeking revenue sharing for its fields?

According to sources, in lieu of handing over its fields, ONGC has sought a share in the revenue. The plan is to outsource field operations to foreign or private firms that offered the highest revenue or production share over and above a baseline production. The ministry is reasoning that the areas where the fields were discovered by ONGC were given to the state-owned firm on nomination basis.

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