ONGC privatisation: Petroleum Ministry wants ONGC to create separate entities for drilling, well service, logging, data processing.
The first attempt at privatization was made in October 2017.
This is the third time in the Modi government when the government has tried to make the country’s largest oil and gas producer ONGC private. The Ministry of Petroleum wants ONGC to create separate entities for drilling, well service, logging, data processing. ONGC has been asked to sell stake in its producing oil fields like Ratna R-Series to private companies.
Apart from this, the ministry has asked the company to bring foreign partner in KG basin gas field, monetization of existing structures and drilling and other services under separate entity. The ministry has suggested to the company that it should take these steps to increase production. Amar Nath, Additional Secretary (Search), Ministry of Petroleum and Natural Gas, has written a letter to Subhash Kumar, Chairman and Managing Director of Oil and Natural Gas Corporation (ONGC) on April 1 to implement the seven-point action plan. It said in the letter that by this ONGC will be able to increase its oil and gas production by one-third by 2023-24.
First failed attempt in October 2017
ONGC has been asked by the Petroleum Ministry to privatize its oil and gas fields for the third time during the tenure of the Narendra Modi government. Earlier in October 2017, the Directorate General of Hydrocarbons, the technical arm of the ministry, identified 15 producing areas with a collective stock of 79.12 million tonnes of crude oil and 333.46 billion cubic meters of gas, which were advised to be handed over to the private sector. The Directorate General believed that this would improve the estimation and discovery of these areas.
Investors did not show interest in the second attempt
A year later, 149 small and marginal sectors of ONGC were identified which could be assigned to private and foreign companies and the company could focus only on large areas. Sources said that due to strong opposition from ONGC, the first plan could not be implemented. The second plan was sent to the Union Cabinet. The cabinet decided to call for bids for 64 border areas of ONGC on 19 February 2019. But the tender received a lukewarm response and ONGC was allowed to keep 49 fields with the condition that it would strictly monitor their performance.
Emphasis on privatization once again
An April 2021 note of the Ministry states that it has been two years since the decision of the Cabinet. In such a situation, the areas which do not perform well should be identified and disinvested.
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