Sops to un­lock ‘un­vi­able’ blocks of ONGC, OIL ex­pected to boost coun­try’s nat­u­ral gas out­put

The Hindu Business Line - - TAKE 500 -

The govern­ment plan to of­fer PSUs spe­cial in­cen­tives for nat­u­ral gas dis­cov­er­ies in dif­fi­cult and un­vi­able ar­eas will help raise In­dia’s nat­u­ral gas pro­duc­tion, as it will un­lock out­put in a dozen fields of state-owned ONGC and OIL, of­fi­cials said on Sun­day.

In­dia cur­rently pro­duces about 90 mil­lion stan­dard cu­bic me­ters per day (mm­scmd) of nat­u­ral gas and has am­bi­tious plans to dou­ble out­put by 2022 to re­duce its reliance on im­ports and re­place some of the pol­lut­ing liq­uid fuels to cut emis­sions.

Speak­ing on side­lines of A bill­board out­side the venue of Petrotech 2019 in Greater Noida, UP. The three-day event be­gan on Sun­day

the Petrotech con­fer­ence here on the out­skirts of Delhi, of­fi­cials said ONGC and OIL have a dozen dis­cov­er­ies, which are un­vi­able at cur­rent govern­ment man­dated

gas price. These finds, they said, need a higher price and the govern­ment plans for spe­cial in­cen­tives for them would help bring them to pro­duc­tion quickly.

Petroleum Min­is­ter Dhar­men­dra prad­han had last month stated “spe­cial in­cen­tive be­sides the in­cen­tive al­ready pro­vided” will be given to dif­fi­cult fields of ONGC.

“We dont know what that in­cen­tive will be, but we pre­sume it will be a higher and re­mu­ner­a­tive price,” an of­fi­cial said.

State-owned Oil and Nat­u­ral Gas Corp (ONGC) and Oil In­dia Ltd (OIL) have not been able to de­velop the dis­cov­er­ies or bring them to pro­duc­tion as the cur­rent gas price of $3.36 per mil­lion Bri­tish ther­mal unit (MMBtu) is way lower than the cost of pro­duc­tion.

The of­fi­cials said the fields can be ex­pe­di­tiously de­vel­oped and mon­e­tised in case pric­ing and mar­ket­ing free­dom is granted by the govern­ment.

ONGC and OIL want a price of over $6 per MMBtu to help them pro­duce the gas with­out suf­fer­ing any losses.

In the ab­sence of a vi­able gas price, they will have to moth­ball $3-bil­lion projects, the of­fi­cials said. The NDA govern­ment had, in 2014, evolved a new pric­ing for­mula us­ing rates preva­lent in gas sur­plus na­tions like US, Canada and Rus­sia to de­ter­mine the price in a net im­port­ing coun­try.

REUTERS

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