ONGC invites global bids for 43 oil and gas fields

Bids to enhance production at 11 on-land contract areas to be made by Dec 3

ONGC has invited bids from private players, including foreign firms, to boost production at its oil fields. These ‘marginal’ fields were given to Oil and Natural Gas Corporation (ONGC) on a nomination basis. A company statement said this was in line with its goal of maximising recovery from its producing fields.

The country’s largest oil and gas producer ONGC has invited bids from private players, including foreign firms, to boost production at its oil fields. These ‘marginal’ fields were given to Oil and Natural Gas Corporation (ONGC) on a nomination basis. A company statement said this is in line with its goal of maximising recovery from its producing fields.

According to ONGC, 11 onland contract areas comprising 43 oil and gas fields with total in-place oil and oil equivalent gas volume of about 160 mtoe (million tonnes of oil equivalent) are on offer. These contract areas are spread across Gujarat, Assam, Tamil Nadu and Andhra Pradesh.

India’s domestic oil production was at 29.1 million tonnes (mt) in 2020-21, while it imported 226 mt of crude oil.

“Eligible companies (Indian or foreign), either alone or in consortium with other companies, may bid for one or more contract areas,” a company statement said.

This is not the first time that ONGC will be undertaking this exercise. “ONGC has successfully contracted 21 fields in different assets for enhancement of production through earlier rounds of bids,” a company spokesperson told Business Standard. The experience till now has been mixed with some success being reported through higher production, while others have shown no improvement.

The Centre has been pushing ONGC to increase its oil and gas production in a bid to trim imports. It has also been taking away fields given to ONGC and fellow public sector undertaking Oil India on a nomination basis and then bidding them out under the discovered small field (DSF) auctions. The goal is to attract fresh capital and enhance domestic production.

To a query on how the

ONGC offering is different from the DSF programmes, the ONGC spokesperson said, “DSF is for the fields which are not monetised whereas in these fields on offer, production has commenced. These are being offered to boost production.”

ONGC said it is inviting bids through its e-bidding portal by December 3 this year. A pre-bid conference will be held on October 20, 2021. There will be “complete marketing and pricing freedom to sell hydrocarbons on arm’s length basis through competitive bidding”, the firm said.

The partner will be selected on a revenue-sharing basis. The revenue will be shared on incremental production over and above the baseline production under the business-asusual (BAU) scenario. The initial contract period will be of 15 years with an option to extend it by five years. There will also be a reduction of 10 per cent in the royalty rate for incremental production of natural gas over and above the BAU scenario.

According to ONGC, there will be an additional incentive for partners to boost production beyond committed incremental production.