New Delhi: Oil minister Dharmendra Pradhan on Monday said the government will allow state-owned ONGC and Oil India to induct private and foreign partners in oilfields to raise output and also give special incentive to make their discoveries in difficult areas viable. Speaking at the launch of second bid round for 14 exploration blocks under open acreage licensing, policy, Pradhan said Oil and Natural Gas Corporation (ONGC) and OIL will have the freedom to decide which of their currently producing fields they want to retain and in the ones where they would like to induct a partner.
This is a climb down from the 2017 position where the oil ministry’s upstream technical advisory body Directorate General of Hydrocarbons identified 15 fields—11 of ONGC and four of OIL—for giving out 60 per cent stake to foreign and private companies. The move couldn’t go through because of tough resistance from the state-owned firms. Then again in October last year, the ministry wanted ONGC to concentrate on large fields as they contribute to 95 per cent of its production and leave out the rest for private firms.
They can decide on the fields they want to retain and the stake they want to give (to foreign and private firms),” he said. Pradhan said “special incentive besides the incentive already provided” will be given to difficult fields of ONGC. ONGC and OIL have not been able to develop some of their discoveries or bring them to production as the current gas price of USD 3.36 per million British thermal units (MMBtu) is way lower than the cost of production.