ONGC opens oilfields to private operators

Monday, 12 January 2004, 20:30 IST
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KOLKATA: India's premier oil and gas explorer is offering "marginal" oilfields to private operators. Oil and Natural Gas Corporation (ONGC) chairman Subir Raha says 32 oilfields with limited viability for the company are on offer to private operators. The private companies will service the fields, but ownership will remain with ONGC. These oilfields have proven reserves and established presence of hydrocarbon, but not enough for ONGC to explore because of overhead costs. Hiring private operators would be cost-effective. "We have received bids for 16 fields and hope to invite bids for 16 other on-shore fields," Raha said. ONGC has 93 marginal fields -- all acquired before the New Exploration Licensing Policy regime came into effect. Raha said the company considered handing over these marginal fields to private firms because "the overhead this company has does not justify setting up operations at these fields", some of which are in distant areas. "We will select private operators on the basis of their ability to operate oilfields and keep overheads and liabilities in check," Raha said. ONGC will pay fixed service charge under long-term production sharing contracts (PSC) that will vary from field-to-field. While an additional bonus could be paid for incremental output, a penalty has also been fixed for firms that don't meet targets. The oil blocks would be offered in phases.
Source: IANS