Five ONGC marginal fields offered on service contracts

Vol 16, PW 6 (04 Oct 12) Exploration & Production
     

Oil India doesn’t want them but do you Next month (November) ONGC will call bids from anyone interested in signing service contracts for five marginal oilfields in Assam.

ONGC previously offered the Disangmukh, Laxmijan, Bihubar, Barsilla and Charaideo fields in Upper Assam to Oil India after prodding from oil ministry officials in May. It seemed like a good idea.

Oil India with its expertise working in Assam’s rugged terrain could develop the fields, located near its own prolific Moran oilfield, at low cost, and ONGC could share in the profits. Unfortunately Oil India rejected the offer after a joint visit with ONGC to the fields in August, it’s not clear why.

ONGC is hoping its attractive new terms - including a promise to pay international crude prices so long as it share 30% of revenues - will attract bidders. This is a much better deal than ONGC’s old marginal field service contracts, which contained archaic elements like a ‘net realisation’ or maximum return from oil production of only $35/barrel.

Such unappealing terms explain why ONGC had bad luck with contractors in the past. Laxmijan, Bihubar and Barsilla were offered on service contracts to Assam Company and Charaideo to Shiv Vani in 2004.

Neither completed the Minimum Work Programme, and were stripped of the fields in September 2009. Oil India is only interested in the Panidihing marginal field, also in Assam, which will not be offered in this tender.

“We want to examine ONGC’s geoscientific data before deciding on Panidihing,” Oil India says. If Oil India is satisfied with the geoscientific data on Panidihing it will jointly prepare a feasibility report with ONGC to develop the field.