Amid stagnating oil and gas production, state-owned ONGC is seeking partners to enhance oil and gas production from its 64 marginal nomination fields with the intention of maximising recovery from these fields by adopting new technology.
The oil explorer has come up with the notice inviting offer (NIO), which allows interested companies to participate in the international competitive bidding (ICB) process announced for 17 onshore contract areas comprising 64 oil- and gas- producing fields with total in-place oil and oil equivalent gas (O+OEG) volume of about 300 million metric tonnes of oil equivalent ( Mmtoe) . “Companies, either alone or in consortium or joint ventures, may bid for one or more contract areas,” said the offer document, adding that the bidders are required to fulfill the requisite technical and financial criteria and the bids would be evaluated on the basis of revenue sharing from the incremental oil and gas production. ONGC will offer marketing and pricing freedom to sell oil and gas on arm’s length basis through competitive basis and the contractor will be selected on a revenue sharing basis. The revenue will be shared on incremental production over and above the baseline production under Business-As-Usual (BAU) scenario.
15-year contract
ONGC is offering the hydrocarbon fields on a contract period of 15 years with an option to extend by 5 years. Besides, exploration permitted includes the right to explore all kinds of hydrocarbons.
The contract will be based on revenue sharing model and offer reduction of 10% in the royalty rate for additional production of natural gas over and above the BAU scenario. The contractors will not be required to reimburse any expenditure already incurred by ONGC. The operators will also be given incentives for achieving production higher than the committed incremental production.
This comes at a time when ONGC production has almost stagnated and the government wants to reduce the country’s dependence on crude oil imports.
Early this year, the Centre had asked the national oil explorer to rope in private players to boost production. India imports more than 80% of its crude oil requirements and 18% of its natural gas needs.
