ONGC request for آ‘Nominationآ’ acreage

Vol 3, PW 23 (08 Dec 99) Exploration & Production

Exploration efforts could also be stepped up in less promising areas of India, if oil minister Ram Naik accepts ONGCs wish for exploration acreage on a nomination basis.

This report learns ONGC has put in a written proposal to the oil ministry to be allowed to explore in regions which have seen little or no exploration activity. The request is for concessions (the exact number is unclear but one report suggests between 15-20) in areas of Madhya Pradesh, Jammu & Kashmir, Himachel Pradesh and Uttar Pradesh, all described by the Directorate General of Hydrocarbons (DGH) as Category 3 and Category 4 basins (i.

e, the least prospective in the country). A source at ONGC tells this report the concessions applied for are unlikely to evoke much interest from foreign explorers and are unlikely to figure in any future licensing round.

Nothing is happening in these permits and exploration is suffering, he said. For this reason, ONGC is asking the oil ministry to grant it exploration rights on a nomination basis, and not via open tender.

ONGC argues that issuing a tender for these concessions will be a waste of time and money, as no one except itself is likely to bid. In its correspondence with the oil ministry, ONGC invokes the ONGC Act, 1956 which allows the company to explore in any part of the country.

The governments problem in accepting ONGCs position is that the introduction of the New Exploration Licensing Policy (NELP) has put an end (in theory) to the award of acreage on a nomination basis. Acceptance of ONGCs request would be regarded as an unhelpful precedent and a move back to the practices of the bad old days.

ONGCs request is thus likely to be resisted by oil ministry officials.