Modi Govt Wanted to Sell ONGC’s Biggest Oil & Gas Fields to Pvt Companies: Report
The plan reportedly did not go through because of strong opposition from the ONGC and from within the govt.
The country’s nine biggest oil and gas fields owned by the state-run Oil and Natural Gas Corp (ONGC) were reportedly sought to be sold to private and foreign companies by the Bharatiya Janata Party (BJP) government at the Centre. The plan, however, got dropped after strong opposition from sections within the government, and ONGC.
Per a report by PTI, a high-level committee appointed by Prime Minister Narendra Modi in October 2018, headed by NITI Aayog chairperson Rajiv Kumar, came close to ‘transfer’ the Western offshore oil and gas fields in Mumbai High, Heera, D-1, Vasai East and Panna. The fields of Greater Jorajan and Geleki field in Assam, Baghewala in Rajasthan and Kalol oilfield in Gujarat were also on the list.
According to the report, PTI sources in the government and NITI Aayog confirmed that the plan of selling off India’s oil fields to private/foreign companies could not go through because of staunch opposition by ONGC as well as from within the government. They reportedly found “something amiss” in the proposal. Besides the nine of the ninety-five percent oil producing fields, 149 other marginal fields, that contribute close to five percent of the oil and gas produce, were also listed for the bid.
It took millions of dollars and years of toiling for ONGC to discover these oil an gas rich fields. The state-run company, hence, protested strongly against the the giving away of these fields to private/foreign sector. Some in the government were not convinced by the proposal or the effort made on part of the government to get it through. These sources told PTI that it wasn’t clear how the committee arrived at the incremental output numbers without any real basin or field study by the panel.
As per the PTI report, private and foreign companies have themselves stayed away from investing in exploration blocks and have instead been sought to get a stake in producing oil and gas fields of ONGC and Oil India Ltd (OIL) claiming that they can increasing output by bringing in capital and technology. National Oil Companies (NOCs), per the report have contended that they too can arrange for the required technology if they are given pricing and marketing freedom.
Earlier this year, the final report submitted by the committee diluted the proposal. It recommended freedom to NOCs to choose field specific implementation model. Pricing and marketing freedom for any new field development plan that they bring was also recommended by the committee.
Sources told PTI that, 64 small and marginal fields of ONGC and two of Oil India Ltd (OIL) were recommended to be bid out within four months and NOCs allowed to retain 54 others (49 by ONGC and 3 by OIL). Per the report, the government has conceded to these recommendations. The government overhauled and notified the policy which now allows for complete marketing and pricing freedom for oil and gas produced from areas bid out in future bid rounds.