Govt plans to give 60% stake of ONGC, Oil In­dia to pri­vate com­pa­nies

Chemical Industry Digest - - News & Views -

The

oil min­istry has cho­sen 11 func­tional oil and gas fields of the state-run firm ONGC and OIL for hand­ing over to pri­vate firms to raise out­put.

The fields to­gether have com­bined re­serves of 791 mil­lion tonnes of oil and 333.46 bil­lion cu­bic me­ters of gas. ONGC will lose con­trol over 11 fields, in­clud­ing Kalol, An­klesh­war, Gand­har - all prized projects pro­duc­ing oil and gas - and the San­thal oil­field. OIL will lose Mo­ran, Greater Dikom, Greater Chand­mari and East­ern Satel­lite, all of which pro­duce oil.

The pol­icy be­ing made of­fers 60% stake with op­er­a­tional con­trol in these fields for 20 years, or the field’s re­main­ing life. The mining lease will also be trans­ferred to the pri­vate com­pany cho­sen through bid­ding. Com­pa­nies of­fer­ing the high­est in­vest­ment within 10 years of the award and rev­enue share will win the fields.

These fields called ‘nom­i­na­tion fields’,, were parcels of land given to ONGC for ex­plo­ration at a time when In­dia was not known for prospec­tiv­ity, or nearly a decade be­fore the auc­tions started. The fields ac­count for 69% of do­mes­tic crude and 75% of gas pro­duc­tion.

Sev­eral for­mer ONGC di­rec­tors told the press that new tech­nol­ogy can be in­ducted with­out di­vest­ing the fields and ONGC was among a few in the world which “con­tin­ues to main­tain, re­vive and raise pro­duc­tion from fields of such vin­tage as Mum­bai High or Bas­sein – or older – us­ing tech­nol­ogy and home-grown in­no­va­tions.”

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