New Delhi: Minister for Petroleum and Natural Gas Dharmendra Pradhan has once again sounded the wake-up alarm for state-run exploration and production PSUs — Oil & Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) — on Tuesday. While stressing that oil and gas reserves held by ONGC and OIL need to be monetised, the minister told the two companies to either monetise them at the earliest through joint ventures with domain experts or the government will take them away and auction them. Speaking at the BNEF Summit, Pradhan reiterated that state-owned firms cannot sit on resources indefinitely in a nation which is a net importer of oil and gas.
Despite the government bidding out acreages to private and other companies since the 1990s, ONGC and OIL have held a sizeable number of acreages for years, said Pradhan.
"We have asked them to do two things — do it yourself, (produce oil and gas) through some joint venture or through a new business model. But the government cannot permit you to hold resources for an indefinite time," he said. "We want to reduce import dependency. We want to monetise our own resources," said the minister.
"So, we have given policy guidance to our state-owned oil companies — either you do it on your own through new partners and new economic model, (else) the government will after a particular period intervene and use its authority to bid out the resources," he said. He added that India needs an ambitious economic growth agenda.
The statement comes in the backdrop of a steady decline in India's crude oil production. ONGC and OIL are responsible for three-fourths of the nation's oil and gas production. In the wake of a decline in domestic production, ONGC, which holds the largest number of acreages in India, has faced severe criticism for its failure to bring discovered fields to production. The government has already taken away a number of discovered small fields from ONGC and OIL and has bid them out under Discovered Small Field (DSF) auctions. At the recently conclude bid round-3 of DSF, Pradhan had said clearly that the government would next time auction major, idle, unmonetised fields of ONGC and OIL. "Resources don't belong to a company. They belong to the nation and the government. They cannot lie with a company indefinitely. If somebody cannot monetise them, we will have to bring a new regime," Pradhan had said on June 10 at the launch of the third bid round.