Wait longer for ONGC marginal fields

Vol 12, PW 5 (24 Jul 08) News in Brief

Anyone interested in ONGC’s non-producing marginal fields will have to wait longer.

A senior ONGC source confirms the oil ministry is preparing a new “more liberalâ€‌ marginal fields’ policy but that once complete, it would still need approval from the DGH and the federal cabinet, before bidding could begin. “It will be more liberal than earlier,â€‌ he says.

“I can’t tell you any more than this now.â€‌ Under the government’s present (outdated) policy for marginal fields, contractors are paid a maximum $35/barrel even though global crude prices can hover around $150/barrel.

However, ONGC pays the royalty and cess (tax) on oil and gas that’s produced. Bidders are persistently calling on ONGC to raise the cap on crude oil prices, in line with global prices, as hire charges for drilling rigs and allied services have skyrocketed making $35/barrel unviable.

ONGC has so far offered marginal fields to private investors under four rounds: two for onland and two for offshore fields.