[<<National oil companies Oil & Natural Gas Corp (ONGC) and Oil India Ltd (OIL) may soon be directed to auction one-third of their 184 producing fields to private operators without charging any past costs for their discovery or development efforts.
A committee headed by Niti Aayog CEO Amitabh Kant recommended last month that ONGC should directly bid out 64 discovered fields and Oil India two to “new operators” under the supervision of the Directorate General of Hydrocarbons (DGH).>>] https://indianexpress.com/article/business/ongc-oil-asked-to-auction-fields-but-without-refund-of-past-spends-5571026/?fbclid=IwAR1g2IivkcUTO8cd1yt_00cI5wHcDaRicT9Zj3A5jIlDZQhBWLempvu6ZUM ONGC, OIL asked to auction fields, but without refund of past spends But the process got stalled after ONGC countered the DGH proposal for auctioning these fields to private firms saying it should also be allowed to participate in the auction with the same concessions as was being offered to private bidders. Written by Amitav Ranjan | New Delhi | Published: February 6, 2019 2:08:08 am The committee has set a deadline of two months (from the date of acceptance of the report) for the NOCs to group these fields geographically and issue the bids two months later. National oil companies Oil & Natural Gas Corp (ONGC) and Oil India Ltd (OIL) may soon be directed to auction one-third of their 184 producing fields to private operators without charging any past costs for their discovery or development efforts. A committee headed by Niti Aayog CEO Amitabh Kant recommended last month that ONGC should directly bid out 64 discovered fields and Oil India two to “new operators” under the supervision of the Directorate General of Hydrocarbons (DGH). “New operator to be selected on revenue sharing basis. Revenue share would go to NOCs (ONGC and OIL). There would be no reimbursement of already incurred expenditure by NOCs,” says the committee recommendations which were accepted by the Petroleum Ministry end-January. These 66 fields are out of the 118 smaller fields that contribute five per cent of the country’s crude oil output of 35.68 million tonnes and natural gas production of 32.65 billion cubic metres. These fields were discovered by NOCs in the exploration basins that were given to them under nomination. The committee has set a deadline of two months (from the date of acceptance of the report) for the NOCs to group these fields geographically and issue the bids two months later. The new owner, in contrast to the prevalent regime given to NOCs, would be given “complete marketing and pricing freedom” but would not be allowed to export the crude oil or natural gas. It has to bear the “entire cost of new technology infusion and operations” but would not be permitted to hypothecate the assets for funding financial and labour charges. The NOCs, under the committee’s recommendation, would be allowed to retain the remaining 52 discovered “small and marginal fields” provided they promise an “enhanced production profile” duly vetted by “an internationally reputed third party”. In order to retain them, the NOCs would have to show that the field was put on production in the last four years; it held hydrocarbon production from unconventional reservoirs as well as predicted ones; its gas output was tied up for a long term supply commitment; and, was under a service contract with a technology provider. However, the committee has recommended that the NOCs could retain a field as long as its oil and gas did not fall below 10 per cent of the agreed performance for the next three years. In case it did, the field would be handed to a private operator, it said.“If performance for three consecutive years is less than 10 per cent than the promised production profile, the field would be considered for privatisation, including farm out,” says the report. As for the remaining 66 producing fields which account for 95 of the country’s oil and gas output, the committee has recommended that the ONGC be given the freedom to form a joint venture for a particular field, farm it out to a third party or, hire a technical service provider. After inducting the global giants — whether producers or technology providers — in these much sought-after fields, ONGC would have to provide an enhanced production profile to the Petroleum Ministry. This has to be done within three months for seven of its largest fields and in six months for the remainder. The submitted profile would be vetted by “an internationally reputed third party expert agency” after which the ministry would sign a memorandum of understanding with ONGC wherein field-wise targets would be fixed. The Committee’s recommendations follow a review meeting taken by Prime Minister Narendra Modi on October 12 where it was suggested that smaller fields be handed over to private firms allowing the NOCs to concentrate on the big ones. A six-member committee under Kant was set up and it included Cabinet Secretary P K Sinha; Niti Aayog Vice Chairman Rajiv Kumar; Petroleum Secretary M M Kutty; DGH Director General V P Joy and ONGC Chairman and Managing Director Shashi Shanker. In October 2017, the then DGH Atanu Chakraborty had identified 15 producing fields — with collective reserve of 791.2 million tonnes of oil and 333.46 billion cubic metres of gas — of NOCs in which 60 per cent equity would be auctioned to global giants in the hope they would improve upon the baseline estimate and its extraction. But the process got stalled after ONGC countered the DGH proposal for auctioning these fields to private firms saying it should also be allowed to participate in the auction with the same concessions as was being offered to private bidders. -- Peace Is Doable -- You received this message because you are subscribed to the Google Groups "Green Youth Movement" group. To unsubscribe from this group and stop receiving emails from it, send an email to greenyouth+unsubscr...@googlegroups.com. To post to this group, send an email to greenyouth@googlegroups.com. Visit this group at https://groups.google.com/group/greenyouth. For more options, visit https://groups.google.com/d/optout.
