The recent introduction of a new government policy in India to develop marginal oil and gas fields has induced state-owned Oil and Natural Gas Corp. (ONGC) to explore the option of bidding for the small fields that it had surrendered earlier to the authorities after finding them uneconomical to develop, local daily The Economic Times reported Wednesday.
Earlier this month, the Indian government revealed plans to auction 69 small, marginal fields in the current fiscal year that would allow producers to sell gas at market price and exercise pricing and marketing freedom for hydrocarbons extracted from these fields. In addition, the developers could explore all forms of hydrocarbon with just one license for the block.
ONGC, which made 63 discoveries in these returned blocks, believed that pricing freedom given to potential operators of marginal blocks had made the development of some of these upstream assets viable.
"They were not viable then. But with a new policy, some of these may be attractive now. We will do the financial modelling again and wherever it's financially viable, we will also bid," DK Sarraf, ONGC chairman said, as reported in The Economic Times.
Meanwhile, the company's foreign upstream unit ONGC Videsh Ltd. hopes to receive the rights to develop and produce from the Farzad field in Iran. ONGC Videsh's Managing Director NK Verma said the company has submitted a development plan for the field and Iranian officials will arrive in India soon to discuss the development proposal, which, if approved, would require 3 to 4 years for the field to be brought into production.
Looking ahead, ONGC Videsh intends to acquire more foreign upstream assets, which are available now at lower prices due to the slump in the global oil market, as the move aligns with the government push to acquire petroleum resources for India's energy security.
"This is the right time. And we will continue to evaluate opportunities for acquisition in the right locations," Verma said, as quoted in The Economic Times.
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