Next auction is for major fields: Govt

„ONGC, OIL set to lose large oil, gas blocks

These resources actually belong to the nation and they will be monetised by bidding them out to interested entities

— Dharmendra

Pradhan

In a bid to maximise the country's hydrocarbon production, the government will auction non-monetised large oil and gas fields of state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL), petroleum minister Dharmen-dra Pradhan said on Thursday.

The statement comes weeks after his ministry asked India's largest oil and gas producer ONGC to sell a stake in producing oil fields such as Ratna RSeries in western offshore to private firms and get foreign partners in KG basin gas fields.

Speaking on the launch of the third round of auction of small, discovered fields, he said companies cannot indefinitely sit on resources they may have discovered. "These resources actually belong to the nation and they will be monetised by bidding them out to interested entities," he added.

As many as 32 oil and gas blocks with 75 discoveries have been offered in the Discovered Small Field (DSF) round-III. These small and marginal fields were discovered by both ONGC and OIL, but they were not economically viable to be developed due to the fiscal regime and their small size.

Under the DSF, liberal terms, including pricing and marketing freedom, are offered, to make them viable. "There will be no

DSF next time. Rather, for the next time, it will be a 'major' round (auction of large fields)," Pradhan said.

He said the Directorate General of Hydrocarbons (DGH), the oil ministry's technical arm, has the "full mandate" to identify unmonetised major fields that could be offered for bidding. "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," he added.

For a nation that imports 85 per cent of its oil needs, resources lying idle for a long time cannot be permitted, he said.

"Our objective to maximise production. So, we have to look at all options available. We cannot have a situation where fields are lying with some for a long time and are not being developed," he said.

This would be the third attempt by the ministry to get ONGC to privatise oil and gas fields.

In October 2017, the DGH had identified 15 producing fields with a collective reserve of 791.2 million tonnes of crude oil and 333.46 billion cubic metres of gas, for handing over to private companies in the hope that they would improve upon the baseline estimate and its extraction.

A year later, 149 small and marginal fields of ONGC were identified for private and foreign companies on the grounds that the state-owned enterprises should focus only on the bid ones.

According to reports, the first plan could not go through because of strong opposition from ONGC. The second plan went up to the Cabinet, which on February 19, 2019, decided to bid out 64 marginal fields of ONGC. But that tender got a tepid response.

ONGC was then allowed to retain 49 fields on condition that their performance will be strictly monitored for three years.

its