STEP­PING ON THE GAS

India Today - - STATES - —Anilesh S. Ma­ha­jan

EARLY DAYS

ONGC an­chors the coun­try’s do­mes­tic oil pro­duc­tion. It owns the big­gest oil fields both on­shore and off­shore, in­clud­ing Bom­bay High, which pro­duces 285,000 bar­rels a day, and the Barmer block, which pro­duces over 200,000 bar­rels daily. Of the seven basins open for com­mer­cial pro­duc­tion, six were opened by ONGC.

ONGC has its ori­gins in the Nehru­vian era. The draft of the 1948 in­dus­trial pol­icy laid em­pha­sis on de­vel­op­ing the pe­tro­leum sec­tor. Prior to In­de­pen­dence, un­di­vided In­dia had only two oil pro­duc­ing com­pa­nies, As­sam Oil and At­tock. In 1955, In­dia de­cided to copy the Soviet model and formed the Oil and Nat­u­ral Gas Direc­torate. But Jawa­har­lal Nehru and his deputy min­is­ter in the min­istry nat­u­ral re­sources, Ke­shava Deva Malviya, soon re­alised the model wasn’t work­ing. In 1956, the direc­torate was raised to the sta­tus of com­mis­sion with en­hanced pow­ers, al­though it con­tin­ued to be un­der the gov­ern­ment. The man­date of the com­mis­sion was to plan, pro­mote, or­gan­ise and im­ple­ment pro­grammes to de­velop pe­tro­leum re­sources, in­clud­ing the sale of prod­ucts pro­duced by it. This was a time when pri­vate play­ers dom­i­nated the lim­ited ex­plo­ration that In­dia of­fered.

EYE ON AC­QUI­SI­TION

The present gov­ern­ment’s tar­get of cut­ting down oil im­ports by 10 per cent by 2022 means ONGC will have to in­crease pro­duc­tion ac­cord­ingly. It is also work­ing out its ac­qui­si­tion of pub­lic sec­tor oil mar­ket­ing com­pany HPCL which will strengthen its po­si­tion in all three ver­ti­cals of the oil busi­ness. The plan is to turn ONGC into an oil gi­ant that can with­stand the low crude oil days. In the past three years, oil prices have been con­stantly hov­er­ing at around $60 a bar­rel, and most in­ter­na­tional play­ers be­lieve this will con­tinue in the long term. As gross re­fin­ing mar­gins and mar­ket­ing mar­gins of re­fin­ers are up, ONGC can ex­pect to see a fu­ture in this ac­qui­si­tion.

BLACK GOLD

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