Modi government’s plan for cash strapped ONGC; focus on big fields, let private firms operate small ones


ONGC is currently cash-starved especially after buying out Hindustan Petroleum Corp and balining out  Gujarat State Petroleum Corp in fiscal 2017-18. (Reuters)

The government is mulling a plan to let state-run explorer Oil & Natural Gas Corporation (ONGC) focus on the big fields and allow private companies to carry out operations in “ small and marginal fields,” The Indian Express reported. The petroleum ministry on October 12, in a meeting with Prime Minister Narendra Modi, showed through a presentation that while 95 per cent of company’s production was from 60 large fields, 149 smaller fields contributed just five percent.

The ministry made a suggestion that private companies could be allowed to take over the smaller fields as ONGC can concentrate on the large fields that contribute to its revenues the most, the report said. The state-run explorer could rope in technology partners via production enhancement contracts (PEC) or technical service arrangements.

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Post meeting, a six-member committee under NITI Aayog CEO Amitabh Kant was constituted, with a November 10 timeline, to present a plan after making consultation with all stakeholders, the report said.

Finance Minister Arun Jaitley; Petroleum Minister Dharmendra Pradhan; ONGC chairman and managing director Shashi Shanker; Oil India Ltd (OIL) CMD Utpal Bora and Petroleum Secretary M M Kutty were the other members present in the meeting.

Meanwhile, ONGC is currently cash-starved especially after buying out Hindustan Petroleum Corp and bailing out  Gujarat State Petroleum Corp in fiscal 2017-18. The state-run explorer, in August 2017, acquired 80 percent stake in GSPC’s KG basin gas block for Rs 7,738 crore which was followed by purchase of the central government’s entire 51.11 percent stake in oil refining and marketing company HPCL for Rs 36,915 crore.

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