ONGC: Up to 50 marginal fields for auction
Up to 50 dormant marginal fields owned by ONGC could soon be offered to private sector companies ready to operate them on service contracts.
No exploration risk is associated with these fields, as all of them are discovered assets. ONGC, we hear, has handed over a list of the 50 fields to the DGH, which in turn passed it on to the oil ministry.
Two months or more are likely to pass before the proposal is cleared, laying open the likelihood of a tender by June this year (2015), at the earliest. Last August the oil ministry asked ONGC to relinquish all marginal fields where it is doing little or no work following a presentation to minister Dharmendra Pradhan.
“ONGC has yet to formally handover the fields to the government,” confirms an ONGC source. “Pradhan wants to fast-track this tender, he doesn't want idle fields with no production.
” ONGC has 165 marginal fields of which 79 are offshore and 86 onshore. An industry source adds the government hopes marginal field production will reduce India’s dependence on oil and gas imports.
A key factor in the auction's success will be pricing. In the past bidders stayed away because ONGC offered a low ‘net realisation’ or maximum return from oil production of up to $35/barrel, regardless of the international price.
