It’s old news that oilfields discovered by ONGC have been privatized. It was done around 25 years back. However, the latest development is that the government is planning to sell ONGC’s stake in operating oil and gas fields. One example is Mumbai High. Sources said that the Oil Ministry may soon approach the cabinet to seek approval for allowing private companies to take participating interest (PI) in a nomination block. As per the current policy, PI or stake can be given to a private party only in cases where the blocks were given out through open auctions. This procedure is being followed since 1999 as per the New Licensing Policy (NELP). It is also to be noted that only exploration acreage was sold through a global bidding process.
It may be recalled that earlier, state-owned companies like Oil and Natural Gas Commission (ONGC) and Oil India Ltd (OIL) used to get the blocks through nomination. Currently, as much as 95 percent of the annual gas production is derived through nomination blocks. ONGC, on its part, is involved in producing 87 percent of the oil from fields that were given to it on nomination basis. Some of the top nominated fields in the country are Mumbai High and Bassein gas field. The former is India’s largest oil field and the latter is the largest gas field. Sources have revealed that the oil ministry is not happy with the stagnation in production. It believes that involving private companies will help boost output of oil and gas.