ONGC set to tender another 19 onland marginal fields

Vol 9, PW 24 (23 Mar 06) Exploration & Production
     

ONGC is set to issue a tender for the development of a second set of onland marginal oil and gasfields.

Work is underway to finalise the detailed terms and conditions of this offer, which will be broadly in line with the first tender for onland marginal fields in September 2003. Like before ONGC will offer only service contracts and not ownership of any oil or gas produced.

PETROWATCH learns ONGC will tender 19 onland fields by the end of this month or in early April. Scattered across Rajasthan, Assam, Krishna Godavari onland, Cauvery and Karaikal onland, they will be a mix of oil and gasfields.

In Rajasthan all the fields will be gas bearing: Bankia, Gotaru, Bhakri-Tibba, Kharatar and Sadewala. In Assam all the fields are believed to hold oil: Hilara, Charideo, Bhubandar and Chanpang.

Six of the seven KG onland fields are said to hold gas: Magatapalli, Mullickapalli, Medapadu, Srikattapalli, Chintapalli and Manepalli. Only the onland KG Pantumilli field is said to contain oil.

In Cauvery onland, Nevyelli and Vadutheru are gas bearing as is the Karaikal onland field. This is the first time ONGC will be offering service contracts for onland gasfields.

In the September 2003 tender, bids were received for four onland gasfields: Gotaru, Mullickapalli, Attikadai and Magattapalli. But ONGC withdrew them from the tender because, a viable mechanism was not found to offload the gas.

One of the conditions of that tender was that ONGC would not buy the gas (because it was artificially kept down to below market levels) and the bidder would have to use it internally or for power generation. ONGC is bolder now because gas prices were partially freed from government control in July 2005.

Last month ONGC is learnt to have signed a contract with Torrent Power of Gujarat to sell 1.5m cm/d from Panna, Mukta and Tapti at $4.75 per mmbtu a new industry benchmark that has given ONGC confidence to tender out gasfields to contractors and sell the gas itself.