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Govt asks ONGC to give 60% stake in Mumbai High, Bassein fields to foreign companies: Report –

The state-run Oil and Natural Gas Corporation Ltd (ONGC) has been asked by the Centre to give away a majority stake of 60 percent in the Mumbai High and Bassein oil and gas fields to foreign entities, a report said on November 1.

According to news agency PTI, which has seen a letter sent on October 28 by the Ministry of Petroleum and Natural Gas to ONGC, the latter has been asked to offer operating control to international partners in addition to the majority stake in the two oil and gas producing fields.

The three-page letter was reportedly sent by Amar Nath, additional secretary (exploration) in the the oil ministry, to ONGC chairman and managing director Subhash Kumar.

In the letter, Nath reportedly cited the low productivity of the Mumbai High and Bassein & Satellite (B&S) offshore assets while asking the company to call international partners with the offer of 60 percent participating interest (PI) and operatorship, PTI said in an exclusive report.

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Nath further stated, as per the report, that the redevelopment projects will increase recovery of Mumbai High field from 28 percent to 32 percent, “which is quite low”.

“The field has substantial potential to contribute to domestic production,” PTI quoted him as saying, adding that the infrastructure such as pipelines and platforms on the fields are “ageing and leaking and need replacement/revamping”.

“The ONGC will, however, find this challenging as its improvement/development projects have lagged behind schedule. Procedural aspects and other constraints will not encourage ONGC to take quick decisions,” he reportedly added.

The company “should bring a joint venture partner of international experience and farm out 60% PI and operatorship of the field,” Nath reportedly wrote.

While projects on B&S Assets, which encompasses Bassin field – the largest gas producing field in India, envisage raising recovery factor to 70% from the current low of 45%, “ONGC can plan for a substantial increase from this field” and “can provide an entry point to international players to India to invest in gas and energy infrastructure,” he added.

Mumbai High, found in 1974, and B&S which was put into production in 1988, are two of the mainstay assets of ONGC. They reportedly contribute around two-third of the company’s current production.

Also Read | Poor show by ONGC, Oil India forcing Centre to auction their large fields

The letter by Nath, reportedly asking ONGC to offset the majority stake in the two major fields, comes months after the then oil minister Dharmendra Pradhan said the government will auction un-monetised large oil and gas fields of ONGC and Oil India Ltd. (OIL) to increase the country’s hydrocarbon production.

“Resources don’t belong to a company. They belong to the nation and the government. They cannot lie with a company indefinitely. If someone does not monetise these resources, new enterprises will have to be brought in (to do so),” Pradhan said in June, during the launch of the third round of auctions for discovered small fields.

According to data from the petroleum ministry, domestic crude oil production dipped 20 percent to 30.5 million tonnes (MT) in 2020-21 from 38.1 MT in 2011-12. Even in 1998-99, the earliest year for which data is available, output was 32.8 MT, 7 percent higher than in 2020-21.

Gross production of natural gas slipped 40 percent to 28,670 million metric standard cubic meters (MMSCM) in 2020-21 from 47,555 MMSCM in 2011-12.

While the dismal show in 2020-21 may have been due to the pandemic, crude production was down at 32.2 MT and natural gas at 31,184 MMSCM in 2019-20.

With PTI inputs