ONGC to Auction Over 60 Small and Marginal Fields to Private Companies

The Oil and Natural Gas Corp (ONGC) will shortly auction more than 60 of its discovered small and marginal fields to private companies.

The fields will be auctioned under the production enhancement contracts (PEC) mechanism, followed by global energy companies to enhance production from mature oil fields.

In January 2019, the government allowed ONGC to rope in the private sector to increase production to better exploit its hydrocarbon resources and reduce dependence on foreign oil.

KPMG, a global advisory services firm, has received the mandate to run the PEC process for ONGC.

The small and marginal fields contribute five percent to the company’s total production while the rest of production comes from 60 large fields.

Marginal fields are discovered fields, but are considered uneconomical for development at the government-mandated price of USD 3.69 per million British thermal units for the April and September 2019 period. This is below the cost of production for most fields to be given for PEC.

Field operations can be outsourced to foreign or private firms offering highest revenue or production share above a baseline production.