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NEW DELHI: The oil ministry is considering divesting 15 oil and gas fields discovered, developed and operated by state-run ONGC and Oil India Ltd (OIL) to private companies, arguing it would induct “world-class technology and oilfield management practices” needed to raise domestic production, “encourage investment, help in skill development and generate employment.”

The fields together have combined reserves of 791 million tonne of oil and 333.46 billion cubic meters of gas. ONGC, India’s largest explorer, will lose control over 11 fields, including Kalol, Ankleshwar, Gandhar – all prized projects producing oil and gas – and the Santhal oilfield. OIL will lose Moran, Greater Dikom, Greater Chandmari and Eastern Satellite, all of which produce oil.

The policy being stitched offers 60% stake with operational control in these fields for 20 years, or the field’s remaining life. The mining lease will also be transferred to the private company chosen through bidding. Companies offering the highest investment - within 10 years of the award - and revenue share will win the fields.

These fields, as they are seen today, were parcels of land given to ONGC – when it was a commission and not corporation – for exploration at a time when India was not known for prospectivity, or nearly a decade before the auctions started. Called ‘nomination fields’, they account for 69% of domestic crude and 75% of gas production.

The government’s move has been prompted by the view that the companies have failed to pump up volumes from these fields to desired levels and private companies should be given a chance. In 1992-93, about 28 of ONGC’s discoveries were privatised practically using the same argument. But this time, the privatisation drive is coming when ONGC is poised for a big leap in oil and gas production with several new projects.

The idea was mentioned during PM Narendra Modi ’s brainstorming session with top global and domestic oil bosses last month. Weeks after that meeting, Vedanta group’s Anil Agarwal sought in an interview “privatisation” of ONGC and Coal India’s “idle assets” for “competition.”

Present members of ONGC management refused to be drawn into the debate. But several former ONGC directors TOI spoke to said new technology can be inducted without divesting the fields and ONGC was among a few in the world which “continues to maintain, revive and raise production from fields of such vintage as Mumbai High or Bassein – or older – using technology and home-grown innovations.”

Indeed, the policy being worked out also proposes offering ONGC’s 19 other fields for technical partnership with oilfield services companies without ceding ownership of the fields.

“Why doesn’t Cairn or Reliance talk about themselves – the former’s production fell 4% in 2015-16 and the latter’s KG-D6 production is down to 10% of the promised figure,” a former ONGC director said on condition of anonymity."

