Page 4 - AsianOil Week 25 2021

AsianOil SOUTH ASIA AsianOil

India rethinks state

majors’ portfolios

The government wants ONGC and OIL to exploit
their oil and gas fields or relinquish them

COMMENTARY THE persistent decline in India’s crude oil pro- production, which has deepened a national reli-
duction is exerting renewed pressure on the ance on imports. Imported oil meets more than
country’s state-run developers to relinquish 80% of Indian demand.
WHAT: some of their licences. India’s crude production amounted to
New Delhi has launched Indian Minister of Petroleum and Natu- 30.5mn tonnes (612,500 barrels per day) in fiscal
its third discovered small ral Gas Dharmendra Pradhan said on June 10 2020-2021, down from 32.2mn tonnes (646,600
field (DSF) bid round. that the government was once again looking to bpd) in 2019-2020 and from a peak of 38.1mn
auction off state-run Oil and Natural Gas Corp. tonnes (765,100 bpd) in 2011-2012, according
WHY: (ONGC) and Oil India Ltd’s (OIL) undeveloped to data from the energy ministry’s Petroleum
National crude oil and gas fields. Planning & Analysis Cell (PPAC).
production continues to Speaking at the launch of the country’s third While ONGC and OIL account for the major-
decline. discovered small field (DSF) auction, Pradhan ity of India’s oil production, the companies have
warned: “Resources don’t belong to a company. failed to achieve the exploration success needed
WHAT NEXT: They belong to the nation and the government. to offset natural declines at their fields.
ONGC and OIL will They cannot lie with a company indefinitely. If ONGC saw its production edge down from
continue to see acreage someone does not monetise these resources, 19.2mn tonnes (385,600 bpd) in 2019-2020 to
they do not develop sold new enterprises will have to be brought in.” 19.1mn tonnes (383,600 bpd) in 2020-2021,
to private players. The third DSF bid round offers 32 contract while OIL’s output slid from 3.1mn tonnes
areas, which cover 75 discoveries that have a (62,300 bpd) to 2.9mn tonnes (58,200 bpd).
combined 232mn tonnes of potential resources. The first DSF round was initiated in 2016,
while the second was launched in 2018, as a
Agile development means of breaking up ONGC and OIL’s sizeable
India’s DSF bid round system is designed to open portfolio of underdeveloped upstream assets
up marginal fields that were awarded to state-run acreage. The rounds are designed to open the
developers under the nomination system. These door to smaller companies willing to invest in
fields have been neglected by ONGC and OIL, acreages with known oil and gas resources, min-
given their perceived lower return on investment imise exploration risk and build development
(RoI). expertise in a new generation of operators.
New Delhi, however, is frustrated by the To encourage this transition the government
continued decline in the country’s crude oil included more liberal terms, such as marketing

P4 www. NEWSBASE .com Week 25 24•June•2021