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Perform or get shipped out: Pradhan to ONGC, OIL

Petroleum Minister Dharmendra Pradhan on Tuesday put state-owned ONGC and OIL on notice saying oil and gas reserves they hold need to be monetised through joint ventures with domain experts or the government will take them away and auction them.

Perform or get shipped out: Pradhan to ONGC, OIL
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Dharmendra Pradhan

New Delhi

Speaking  at  BNEF  Summit,  he  said  state-owned firms cannot indefinitely sit  on  resources  when  the  nation  is  a  net importer of oil and gas. Despite In-dia  bidding  out  acreages  to  private  and  other  companies  since  the  1990s,  Oil   and   Natural   Gas   Corporation   (ONGC) and Oil India Ltd (OIL) hold a “sizeable    number    of    acreage    for    years,” he said.

“We  have  asked  them  to  do  two  things - do it yourself, (produce oil and gas) through some joint venture (with domain  experts  and  foreign  companies)  (and)  through  a  new  business  model.   But   the   government   cannot   permit  you  to  hold  resources  for  an  indefinite time,” he said. ONGC  and  OIL,  which  discovered  and  brought  to  production  all  of  India’s  eight  sedimentary  basins,  pro-duce  about  three-fourths  of  the  nation’s oil and gas.

The two, especially ONGC,  have  faced  criticism  ranging  from  not  being  able  to  quickly  bring  discoveries to production to lower recovery.  Pradhan  said  India  needs  energy    for    its    ambitious    economic    growth agenda.

“We want to reduce import dependency.  We  want  to  monetise  our  own  resources.”  “So  we  have  given  policy  guidance  to  our  state-owned  oil  companies  -  either  you  do  on  your  own  through  new  partners  and  new  economic  model,  (else)  the  government  will  after  a  particular  period  intervene  and  use  its  authority  to  bid  out  the resources,” he said.

The  government  has  already  taken  away  dozens  of  small  and  marginal  discoveries  from  the  two  firms  and  auctioned  them  in  what  is  known  as  Discovered  Small  Field  rounds.  DSF  offers pricing and marketing freedom to operators, something which ONGC and  OIL  do  not  have  currently,  constraining   their   efforts   to   monetise   smaller discoveries. But now Pradhan has  indicated  the  Centre  would  not  hesitate  to  take  away  larger  idle  discoveries  and  auction  them  to  private  and foreign players.

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