ONGC produces more than 60% of India’s oil and gas output and has resisted several attempts at privatizing its fields over the past few years.
In the latest move, the oil ministry wrote to ONGC last month, asking it to give away 60% participating interest and operatorship in Mumbai High and Bassein fields to international players.
These two fields, located off the Mumbai coast, together account for half of domestic gas and more than 23% of oil production. Lower recovery rates in the two ageing fields, slower project implementation by ONGC, and government rules that constrain a public sector enterprise’s functioning were cited as the key grounds for privatisation in the ministry’s letter.
The letter, written by an additional secretary, has rattled ONGC executives. They told ET on condition of anonymity that such suggestions were ‘unfair’ to the company and that the government should instead encourage foreign companies to bid for exploration acreages.
The government is now softening its stand.
Kapoor said the proposal of a 60% stake sale would not apply to producing areas of the two fields.
There is a large scope to develop currently non-producing areas in these fields and private partners with access to advanced technology can help in that, he said.
For full report, go to www.economictimes.com
