Angry ONGC and Oil India hit out at new PECs

Vol 20, PW 24 (24 Aug 17) Exploration & Production

Anger is growing at ONGC and Oil India as oil minister Dharmendra Pradhan steps up pressure on them to hand over oil and gasfields to service contractors under Production Enhancement Contracts (PECs).

"Pradhan thinks ONGC and Oil India are useless," says an upset Oil India source. "He thinks we cannot increase production from our fields but believes service providers can.

Why are we needed?" On July 18, ONGC accepted EoIs from Schlumberger, GE (Baker Hughes), Halliburton and AlMansoori Petroleum Services, all interested in PECs. Weatherford also attended the EoI conference at ONGC's office in Ahmedabad on July 7 but then chose not to submit an EoI.

When contacted, the ONGC officer overseeing the PEC project appeared clueless about which fields to offer. "We're not offering the Ahmedabad asset yet," he said.

"Our fields are spread across India. We still haven't decided whether to offer only onshore fields or offshore as well." When it decides, ONGC will pay whoever wins a fee for increasing production from a fixed baseline confirmed by a third party consultant.

For example, ONGC's Ahmedabad asset produces 3500 t/d (25,655 b/d) oil and 3.9m cm/d from 1200 wells: the baseline against which any production increase will be measured. ONGC earlier signed MoUs with Schlumberger and Halliburton on December 7, 2016 to increase production from Geleki in Assam and Kalol in Gujarat but those MoUs were cancelled in July this year (2017).

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