Lesser-known firms win ONGC's 49 oil, gas fields

Lesser-known firms such as Duganta Oil and Gas and Orissa Stevedores Ltd have won 49 small and marginal oil and gas fields that state-owned ONGC had bid out on government direction. ONGC had at the close of bidding in January received bids for 50 out of the 64 small and marginal oil and gas fields it offered in a bidding round for raising production by involving private companies.

Of these, the company has now awarded 49 of them. "Oil and Natural Gas Corporation Ltd (ONGC) placed Notice of Award (NoA) to seven successful bidders in 13 contract areas comprising of 49 marginal oil and gas fields," the company said in a statement.

ONGC clubbed the 64 fields in Gujarat, Assam, Andhra Pradesh, and Tamil Nadu into 17 onshore contract areas by clubbing some of them. These have a cumulative 300 million tonnes of oil and oil equivalent natural gas reserves. As many as 12 companies made 28 bids for 50 fields at the close of bidding on January 17.

Sources said 28 bids were received for 14 clusters, covering 50 fields, but none for three clusters that cover 14 fields. "Through a detailed process of evaluation as per the tender conditions, seven companies have now been awarded 13 onland contract areas spread across the states of Gujarat, Tamil Nadu, Andhra Pradesh and Assam," ONGC said in the statement without giving details of the winners.

Sources said the winners include Duganta Oil and Gas Pvt Ltd which was sole bidder for fields in Assam and Cauvery basin of Tamil Nadu, and Orissa Stevedores Ltd that was bidder for two clusters in Assam. "It is expected with the award of these contract areas, the production from these marginal fields would be enhanced," the statement said.

Duganta Oil and Gas Pvt Ltd had made four bids, while Orissa Stevedores Ltd, Priserve Infrastructure Pvt Ltd and Udayan Oil Solutions Pvt Ltd made three bids each. ONGC bid out the fields on government instructions.

The government, sources said, wasn't happy with the efforts of ONGC and saw output rising with the involvement of private companies. In the bid document, ONGC sought partners who could raise output beyond a pre-agreed baseline and will share revenues from such incremental production with them.

The sources said salient features of the ONGC offering included complete marketing and pricing freedom to sell oil and gas on arm's length basis through the competitive system. ONGC said the contractors were 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. The contract period will be for 15 years with an option to extend by 5 years.

ONGC invited bids under the production enhancement contract (PEC) from the interested companies, who can bring in technology for raising the output. The government has been unhappy with ONGC over its stagnant oil and gas production, and inducting partners in small and marginal fields was a way of raising output that was agreed to in a meeting with Prime Minister Narendra Modi in 2018.

ONGC had previously experimented with PEC contracts for two fields but has not been able to select a partner because of receiving conditional bids. The latest PEC tender was on more liberal terms. There will be a reduction of 10 per cent in the royalty rate for additional production of natural gas over and above BAU scenario.

Exploration will be permitted during the contract period, including the right to explore all kinds of hydrocarbon..

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)