- Wednesday, April 24, 2024
By: Shubham Ghosh
INDIAN petroleum minister Dharmendra Pradhan on Tuesday (29) put the state-owned ONGC (Oil and Natural Gas Corporation) and OIL (Oil India Limited) on notice saying oil and gas reserves they hold need to be monetised through joint ventures or the government will auction them away.
Speaking at the BloombergNEF Summit in New Delhi, Pradhan said the state-owned firms could not indefinitely sit on resources when the country is a net importer of oil and gas. Despite India bidding out acreages to private and other companies since the 1990s, the ONGC and OIL hold a “sizeable number of acreage for years,” the minister said.
“We have asked them to do two things – do it yourself, (produce oil and gas) through some joint venture (with domain experts and foreign companies) (and) through a new business model. But the government cannot permit you to hold resources for an indefinite time,” he said.
The two firms, which discovered and brought to production all of India’s eight sedimentary basins, produce about three-fourths of India’s oil and gas. Of the two, the ONGC has particularly faced accusations like not being able to quickly bring discoveries to production to lower recovery.
‘We want to reduce import dependency’
Stressing that India requires energy for its ambitious agenda of economic growth, Pradhan said: “We want to reduce import dependency. We want to monetise our own resources. So we have given policy guidance to our state-owned oil companies – either you do on your own through new partners and new economic model, (else) the government will after a particular period intervene and use its authority to bid out the resources.”
The government has already taken away many small and marginal discoveries from the two firms and auctioned them in what is called Discovered Small Field (DSF) rounds. It offers pricing and marketing freedom to operators, something ONGC and OIL lack currently which constraints their efforts to monetise small discoveries.
Pradhan has now given indication that the government would not hesitate to take away larger idle discoveries and auction them to private and foreign players.
Earlier this month, the petroleum minister had said that the Directorate General of Hydrocarbons – the oil ministry’s technical arm – had the “full mandate” to identify unmonetised major fields that could be taken up for bidding.
“Resources don’t belong to a company. They belong to the nation and the government. They cannot lie with a company indefinitely. If somebody cannot monetise them, we will have to bring a new regime,” Pradhan had said on June 10.
