Govt readies action plan to boost ONGC’S production
NEW DELHI: The Centre has proposed a detailed action plan to boost the dwindling oil and gas production of state-run Oil and Natural Gas Corp (ONGC) Ltd that includes hiving off noncore businesses into separate firms, monetising existing infrastructure, decentralisation of decision-making on operational matters and partnerships with private energy majors, two officials close to the matter said on Monday.
In lines with the Atmanirbhar Bharat (self-reliant India) policy, the government has decided to reduce India’s overreliance on imported oil.
It has set production targets of 40 million metric tonnes (MMT) of crude oil, and 50 billion cubic meters (BCM) of gas by 2023-24 where ONGC is tasked to contribute 70%, the officials said requesting anonymity. India imported over 89% of crude oil it processed in 2019-20.
“India’s domestic crude oil production is constantly on a decline. It is mainly because ONGC, which contributes about 70% of the domestic output, is unable to ramp up production from existing fields and could not add new fields under production. Hence, the action plan,” one official said.
While ONGC’S crude oil output fell to 20.71 MMT in 2019-20 from 21.11 MMT in 2018-19, natural gas production declined to 23.85 BCM in 2019-20 compared to 24.75 BCM in previous year.
ONGC is given a target to achieve 28 MMT of oil and 35
BCM of gas production by March 31, 2024, second official said.
“Therefore, there is an urgent need to restructure and revamp ONGC to enable it to function as an engine of exploration of production [E&P] growth in lndia,” he added.
According to a note giving details of the restructuring proposal, ONGC is asked to hive off its non-core businesses into separate companies.
Given its experience in every sphere of E&P, ONGC may explore creating separate entities for drilling, well services, logging, work-over services and data processing entities through various modes, such as startups, investment trusts, societies and companies, it said.
HT reviewed
the note.