KOLKATA (miningweekly.com) – India’s State-run oil and natural gas exploration and production (E&P) major, ONGC, has received 28 bids for 50 oil and natural gas blocks of the total 64 small and marginal fields that it had put on offer in a search for production-raising partnership.
ONGC had clubbed the 64 small and marginal fields into 17 clusters with estimated cumulative reserves of 300-million tons. Private investors had put in 18 bids for 14 clusters of the 50 blocks, while three clusters of 14 blocks did not received any bids, officials privy to the information said.
ONGC had been under pressure from the government to either increase production from small and marginal fields in its portfolio or divest them in favour of private E&P companies. However, the State-run company was averse to handing over these assets and, instead, sought bids from private companies for partnerships through which the two would increase production as per pre-determined baselines and revenue sharing from the incremental production achieved.
One of the highlights of the proposed contract with successful private bidders would be complete free marketing and pricing for the private partner on an arm’s length basis through open competitive marketing process, the officials said.
The contract between ONGC and private partners would initially be for a period of 15 years with a clause for an extension of a further five years.
The proposed partnerships with private E&P companies to develop sub-optimal small and marginal fields is against the backdrop of ONGC being compelled by government to reverse the falling trend in oil and natural gas production from its assets.
During December, ONGC reported production of 1.78-million tons, down 11% from a target of 1.98-million tons.
India’s total crude oil production during December 2019 was reported by the government to be 2.65-million tons, down 11% from the target of 2.97-million tons, which spurred a resort to imports which had already touched 1.63-billion barrels in the nine-month period from April to December of fiscal 2019/20.