The Petroleum Ministry has asked state-owned ONGC to give 60 per cent stake in the country’s largest oil and gas producing fields – Mumbai High and Bassein – to foreign companies. Foreign companies have also been asked to give operational control of these oil and gas producing fields with 60 per cent stake. According to a report by news agency PTI, the Petroleum Ministry wrote a letter to ONGC in this regard on October 28.
This letter has been written on behalf of Amar Nath, Additional Secretary (Exploration), Ministry of Petroleum and Natural Gas, to ONGC (Oil and Natural Gas Corporation) Chairman and MD Subhash Kumar. The letter said production from Mumbai High and Basai & Satellite (B&S) offshore assets under ONGC’s control is low. As such, international partners should be invited and given 60 per cent stake and operational control.
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This is the second time since April that Amar Nath has officially written such a letter, in which it has been said about the company’s weak performance. He has been a government-nominated director on the board of ONGC for a long time and is part of the management. It is understood that he may replace Subhash Kumar next year.
According to the report, Amar Nath has written in the letter that the production from Mumbai High Field is continuously decreasing. This will increase from 28 per cent to 32 per cent with redevelopment projects. Although it is still very less. “This field has great potential to contribute to domestic production,” he wrote. He also said that the infrastructure like pipelines and platforms in the field is old and leaks are also taking place from there. So it needs to be changed or improved.
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“However, it will be challenging for ONGC as its reforms or development projects are running behind schedule. Procedural aspects and other constraints will not encourage the company to take a quick decision,” he added. The additional secretary has written that ONGC should bring companies with international experience in the form of JVs and give them 60 per cent stake in the field and the responsibility of running them.
Whereas projects on B&S assets, which include the basin area – the largest gas producing region in India, envisage raising the recovery factor to 70% from the current 45%. It is envisaged to increase the recovery factor in projects with B&S assets to 70 per cent from the current 45 per cent. Hence, ONG can plan for substantial production growth from this sector and gas and energy infrastructure in the country, he wrote. It can provide opportunities for international companies to invest in. The B&S assets include the Basai Field, the largest gas producing field in the country.
“ONGC should consider inviting experienced international partners and hand over 60 per cent of the issue and operation control,” he wrote. Mumbai High was discovered in 1974 and production at B&S began in 1988. These are ONGC’s core assets and account for two-thirds of its current oil and gas production. He also reiterated the sale of stake in ONGC’s drilling and well services units.
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