New Delhi: The government may allow state-run
ONGC to auction small and marginal fields that it has not
found economical to develop, so that the discoveries in the
fields could be brought into production.
Oil and Natural Gas Corp has a total of 165 marginal
fields, out of which 144 fields have either been put on
production or are in the process of monetisation. The
remaining 21 fields may be auctioned for development through
an international competitive bidding (ICB) route, company
sources said.
These 21 marginal fields comprise of five oilfields (four
onland and one offshore), 14 gas fields (nine onland and five
offshore) and two offshore oil and gas fields, which have been
estimated to cumulatively hold crude reserves of 0.4969
million tons and gas reserves of 1.519 billion cubic meters.
Marginal fields are the oil and gas discoveries made by
national oil companies in blocks awarded to them on nomination
basis, but have not been exploited on the ground of commercial
viability of technologial constraints.
The sources said the Petroleum Ministry is likely to
approach the Cabinet Committee on Economic Affairs (CCEA) soon
for approval of the new Marginal Field Policy (MFP) under
which ONGC and Oil India Ltd can auction off a large number of
marginal fields, where discoveries have been made but not
monetised, for development.
Of the 21 marginal fields of ONGC, five are in Gujarat,
one in Rajasthan and seven in Andhra Pradesh while the
remaining eight are in shallow water off the west coast. OIL
has 14 marginal fields.
Public and private companies would be invited to bid for
development of these marginal fields, they said adding
successful companies would be asked to begin production from
onland fields within three years and from offshore fields in
five years.
The companies developing the fields may either get a
fixed fee for their efforts or may share the output with the
state-run firms in a pre-decided ratio.
The proposed policy also provides for the companies
paying only half of the applicable royalty on crude oil and
gas they produce while being completely exempt from payment of
Rs 2,500 per tonne cess on oil.
As per a draft version of the policy, discoveries made
after May 1, 2008, in nomination blocks held by ONGC and OIL,
would auctioned if production does not commence by April 2013
in case of onshore fields and by April 2015 in case of
offshore fields, the sources added.
Bureau Report