ONGC says it wants foreign partners in new areas, Energy News, ET EnergyWorld

New Delhi: India’s leading oil and gas producer CGSB said on Wednesday it was seeking foreign partners for fields yet to be developed in less promising areas, but was hampered by gas prices and a unprofitable tax structure.

Reacting to a report by the PTI on the Ministry of Petroleum asking the Oil and Natural Gas Corporation (ONGC) to sell its stake in oilfield production to private companies, obtain foreign partners in the gas fields of the basin of KG, monetize existing infrastructure and get rid of drilling and other services in a separate company to increase production, the state-owned company said ongoing discussions with the administrative ministry were neither new nor intended to limit its role or growth.

“ONGC is also exploring strategic relationships and close alliances with key international players through (the overseas arm) of ONGC Videsh,” the company said in a statement.

“The intention is to invite foreign participation to explore Category II and Category III pools that match the size and scale of the expectations and portfolio of these large players.”

The Indian sedimentary basin is divided into three categories – Category I includes production basins such as Krishna Godavari, Mumbai Offshore, Assam and Rajasthan; Category II basins are less prospective and contain contingent resources to be developed and produced (eg Kutch, Mahanadi, Andaman-Nicobar, Saurashtra Vindhyan); Category III contains only forward-looking resources to explore and discover (e.g. Kerala-Konkan, Ganga Punja, Bengal-Purnea, Narmada, Himalayan Foreland, etc.).

On April 25, PTI reported that Amar Nath, Additional Secretary (Exploration) at the Ministry of Petroleum and Natural Gas, wrote on April 1 to CGSB President and CEO Subhash Kumar to give him a plan of action. seven points, “ ONGC Way Forward ”. would help the company increase its oil and gas production by a third by 2023-24.

He identified maturing fields such as Panna-Mukta and Ratna and R-Series in western offshore and onshore fields like Gandhar in Gujarat for the sale of stakes to private companies, as well as the gas-rich block KG -DWN-98/2 and recently introduced in production block Ashokenagar in West Bengal for the participation of foreign partners.

All fields identified by the ministry letter are in Category I ponds and are in production. But ONGC wants foreign companies to share the exploration risk.

ONGC in the statement said, “The ongoing discussions are neither new nor intended to limit the role or growth of ONGC.”

“In fact, during the ongoing discussions, ONGC has had the opportunity to raise issues that are essential for ONGC to achieve the goals of creating value for all stakeholders,†he said.

“Despite unprofitable gas prices, ONGC is aggressively pursuing its deep water projects on the east coast and a few shallow water projects on the west coast.”

ONGC also has a plan to acquire much larger acreage through an open acreage license policy (OALP). “There are some issues around the structure where the milestones can only be assessed once the industry is fully under the GST regime,” he said.

Oil is not subject to the Goods and Services Tax (GST) regime and operators must pay the state VAT without compensation, all services.

“The requirement and the opportunity for ONGC is to play an even more pronounced role in improving the energy security of the country. ONGC is convinced and convinced that the ongoing discussions within ONGC and with its stakeholders will contribute to bring greater value to all stakeholders, and to make CGSB a much stronger business organization, on par with the best in the world, â€the statement said.

According to ONGC, contrary to the impression conveyed by the communication of the ministry according to which the role of the company is significantly affected, “the government has continued to encourage ONGC to play a much more important role in the context of the petroleum sector. and Indian gas company “.

The CGSB Board of Directors approved Energy Strategy 2040 in April 2019, which outlines strategic growth initiatives along the energy value chain.

“In addition, there have been regular interactions of ONGC with various stakeholders, including the Ministry of Petroleum and Natural Gas (MoPNG), in order to further strengthen the role of ONGC in the upstream domestic sector”, he indicated.

“CGSB’s expectation and strategy is to act as the hub around which an ecosystem for a thriving oil and gas industry in the country can be created in line with expectations to meet the Prime Minister’s vision of reducing reliance on oil and gas. imports.”

ONGC said it is continually reviewing its commitments to move higher in the value chain to focus on areas where the expected risk-reward ratio offers better business opportunities for growth.

“Over the years, ONGC has benefited from the participation of other actors and specific alliances of opportunity that have helped ONGC increase its value to itself, in addition to freeing up CGSB resources to pursue opportunities. more promising with a better risk / perceived return compromise.

“ONGC, in its efforts to increase oil and gas production, strives to involve all relevant stakeholders so that the concept of ‘Atma Nirbhar Bharat’ is the central theme in the execution of our national project”, did he declare.

The ministry has set a goal of producing 40 million tonnes of crude oil and 50 billion cubic meters of natural gas in the country by 2023-24.

The bulk of the national production targeted for 2023-24 is expected to come from ONGC, which is expected to contribute 70% of national production – 28 million tonnes of oil and 35 billion cubic meters of gas by 2023-24.

CGSB produced 20.2 million tonnes of crude oil in the fiscal year ending March 31 (2020-2021), up from 20.6 million tonnes the previous year and 21.1 million tonnes for 2018 -2019.

It produced 21.87 billion cubic meters of gas in 2020-2021, compared to 23.74 billion cubic meters the previous year and 24.67 billion cubic meters in 2018-2019.