ONGC officers resist govt plan to offer Mumbai High to private sector, demand level playing field

• ASTO has argued that farming out 60 percent participating interest and operatorship in these fields shall have a major negative impact on ONGC's performance
• ONGC should be allowed to operate within the same fiscal and regulatory regime that is offered to the private sector for exploration and production of oil and gas, ASTO has said

New Delhi: The officers' union of Oil & Natural Gas Corporation (ONGC) has voiced their resistance against the government's revamp plan for ONGC for increasing domestic oil and gas production and have said that the government should provide a level playing field to the company instead of handing over the PSU's biggest assets to the private sector on a platter. In a letter to Minister for Petroleum and Natural Gas Hardeep Singh Puri, Amit Kumar, president of the Association of Scientific and Technical Officers (ASTO) of ONGC, has said that past attempts to hand over producing fields, like Panna, Mukta, Ratna, Tapti and PY-3, on a platter to the private operators have not yielded desired results.

The letter comes in the backdrop of a proposal floated by Amar Nath, Additional Secretary in the Ministry of Petroleum and Natural Gas, for giving away 60 percent stake and operatorship of ONGC's Mumbai High and Bassein and Satellite offshore assets to international partners for raising output. 

ONGC officers demand a playing field at par with private sector

While asserting that Mumbai High, Bassein and Satellite have been the cornerstone of the country's oil and gas production for several decades, ASTO has argued that farming out 60 percent participating interest and operatorship in these fields shall have a major negative impact on ONGC's performance. The officers' union has said that the company and its employees are completely aligned with the government's objective of increasing domestic oil and gas production but has argued that it can happen only when ONGC is allowed to operate within the same fiscal and regulatory regime that is offered to the private sector for exploration and production of oil and gas.

In the letter, the ASTO president has demanded from Puri that the mechanism for determining the price of natural gas be reviewed to make gas production viable and ONGC be given freedom to market small pools of natural gas. He has also urged the minister to optimise the number of statutory clearances and authorities and to rejig procedural framework to enable ONGC to take faster decisions. "Sir, farming out PI in existing fields shall not yield the desired results of enhancing domestic production instead providing a level playing field and empowering ONGC to further enhance productivity will," Kumar has said.

'Hiving off ONGC's drilling, workover services will have negative impact'

The officers' union, which represents 17,000 ONGC officers, has also cautioned the government against hiving off the PSU's drilling and workover services into a separate company, saying that it will increase the cost of production. "Sir, hiving off drilling and workover services into a separate company shall have negative impact on the overall exploration and development plans of ONGC. The integrated setup of ONGC has been a big advantage for its operations. Drilling nearly 500 wells per annum and carrying out nearly 1,500-1,600 workovers in a year has been possible because of this integrated in-house services that ONGC has. Initial estimates suggest that having a separate services company may further increase the cost of production and therefore shall compromise further investments that is required for aggressive exploration," Kumar has said in the letter.

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