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ONGC Should Decide On Mode For Raising Oil, Gas Output: Petroleum Ministry

The Petroleum Ministry said that production from existing fields has to be increased through all means.

Oil rig at sea. (Image for representational purpose: Pexels)

New Delhi: Weeks after its second-highest-ranking official asked ONGC to give away its largest producing oil and gas fields to foreign companies, the Petroleum Ministry on Monday clarified that production from existing fields has to be increased through all means including technology and involvement of private sector companies in a transparent manner.

Amar Nath, additional secretary (exploration) in the Ministry of Petroleum and Natural Gas, had on October 28 written a three-page letter to ONGC Chairman and Managing Director Subhash Kumar, saying productivity of the Mumbai High and Bassein & Satellite (B&S) offshore assets under state-owned firm was low and international partners should be invited and given 60 per cent participating interest (PI) and operatorship.

The proposal has met with strong resistance from the management of Oil and Natural Gas Corporation (ONGC) as well as its unions who feel its assets are being given away on a platter to the private sector.

“The government is keen that the domestic production of oil and gas should increase exponentially. ONGC, being the leading organization, has to play an important role,” the ministry said in a statement on Monday.

It said the area under exploration has to be increased which would subsequently lead to more new discoveries in the country.

Also, “production from existing fields has also to be optimised and increased wherever possible by employing advanced technology, drilling more production wells, wherever technically feasible, and better management,” it said. “For this private sector companies can be involved as partners or through various business models so that new techniques and technology can be brought in through such companies which have experience in this.”

“However, all this has to be done by following system and procedures in a transparent manner. ONGC has to prepare its plan and take the right decisions in order to increase domestic production,” it added.

The ministry said the government had decided in February 2019 that national oil companies (NOCs) would be free to choose field-specific models including farm out (selling stakes) and joint venture/technical service model (TSM) for enhancing production from their mature and aging fields.

“There is enough scope for several large and small companies to operate in the offshore and onshore basins in the country as the substantial area is still available,” it said.

Nath, who is the longest-serving director on the board of ONGC, had written the letter just a day before the company held a strategy meet.

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The ministry said ONGC had conducted an internal Strategy Meet at Udaipur from October 29 to 31 for which suggestions including making a 25-year energy perspective plan, 15 years exploration plan by taking more acreages under exploration and having partnerships for its major fields, with the scope of enhancing recovery and technology infusion, were made.

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