Govt Can Sell 60% Of ONGC To Foreign Firms: India’s Most Valuable Maharatna PSU
The government wants ONGC to rope in private sector companies and service providers to help boost oil and gas production.
On October 28, Amar Nath, additional secretary (exploration) in the Ministry of Petroleum and Natural Gas, reached out to ONGC Chairman and Managing Director Subhash Kumar.
In his letter, he complained about low productivity of the Mumbai High and Bassein & Satellite (B&S) offshore assets and that international partners should be given 60% participating interest (PI) and operatorship.
Most Valued Assets
Mumbai High and Bassein in particular are India’s largest oil and gas producing fields.
They are also ONGC’s mainstay assets and account for two-thirds of its current oil and gas production.
Without them, the company is left with only smaller fields.
The public sector giant is under pressure to explore options to discover more oil and gas reserves and increase domestic production.
It is all the more important to raise domestic output since India is 85% dependent on imports to meet its oil needs and the high import bill needs to come down.
The dependence can be attributed to stagnating local oil and gas output.
How Private Players Can Help
Cases where the company can bring in the private sector include discoveries that it hasn’t been able to develop or areas that it hasn’t been able to explore.
It should identify such areas where private sector expertise and efficiencies might bring about improvements.
Private firms can contribute through technical collaboration and by enhancing production from existing fields.
Repeated Requests To Privatise
This marks the third attempt by the oil ministry to get ONGC to privatise its oil and gas fields.
On April 1, Nath had written to Kumar recommending that he sell stake in producing oil fields such as Ratna R-Series to private firms.
Other suggestions include involving foreign partners in KG basin gas fields, monetise existing infrastructure, and hive off drilling and other services into a separate firm to raise production.
It is only the ONGC board which can take the final call since the government cannot give directives to a Maharatna company.