Revamp not to impact biz; in talks with global cos for large fields: ONGC

ONGC plans to acquire much larger acreage via open acreage licensing policy

The country's largest oil producer Oil and Natural Gas Corporation today defended its business prospects as also government strategy, stating that the ongoing discussions with all stakeholders was helping it raise issues important for the company and any "potential" restructuring of the company would not significantly affect the company.

Press Trust of India had, on April 25, reported the petroleum ministry has told ONGC to sell stake in producing oil fields such as to Ratna R-Series to private firms, get foreign partners in the Krishna Godavari basin gas fields, monetise existing infrastructure, and hive off drilling and other services into a separate firm to raise production. Amar Nath, additional secretary (exploration) in the Ministry of Petroleum and Natural Gas, on April 1 had written to ONGC chairman and managing director Subhash Kumar giving a seven-point action plan, ONGC Way Forward, that would help the company raise oil and gas production by one-third by 2023-24. 

The company did not deny receipt of the letter but said it was also looking into strategic relationships and close alliances with key international players through ONGC Videsh. Intention is to invite foreign participants to explore Category-II and Category-III basins which match the size and scale of expectations and portfolio of these large players. "So, it can be stated that the ongoing discussions are neither new nor intended to limit the role or growth of ONGC. Requirement and opportunity for ONGC is to play an even more pronounced role in improving energy security of the country. ONGC feels confident and comfortable that the ongoing discussions within ONGC and with its stakeholders will help deliver greater value to all stakeholders," said the statement. 

"In fact during the ongoing discussions there has been an opportunity to raise issues which are critical for ONGC to achieve the objectives of delivering value to all stakeholders," a company statement said. It cited the example of goods and service tax and natural gas prices. Despite the uneconomical gas prices, the company has been aggressively pursuing its deepwater projects in the East Coast and a couple of shallow water projects in the West Coast, it said.

ONGC plans to acquire much larger acreage through open acreage licensing policy. "There are certain issues around structure where decisive steps can be evaluated only once the industry is completely under GST regime," said the statement.

The company said there have been regular interactions of ONGC with various stakeholders including the Ministry of Petroleum and Natural Gas (MoPNG), in order to further augment the role of ONGC in the domestic upstream sector. "The expectation and the strategy for ONGC is to act  as the fulcrum around which an ecosystem for thriving oil and gas industry in the country can be created," it said. The ONGC Board had approved Energy Strategy 2040 in April 2019 that outlines strategic growth initiatives across the energy value-chain.

In this context, ONGC has continuously been reviewing its engagements to move up higher in the value chain to concentrate on areas where the expected risk-reward payoff offers better business opportunities for growth. 

ONGC Videsh Limited, a wholly-owned subsidiary and overseas arm of Oil and Natural Gas Corporation Limited (ONGC), has invoked force majeure in a liquified natural gas (LNG) project in Mozambique. Considering the evolution of the security situation in the north of the Cabo Delgado province in Mozambique, the Area 1 Operator Total E&P Mozambique Area 1 Limitada informed the withdrawal of all Mozambique LNG project personnel from the Afungi site. This situation leads Total E&P Mozambique Area 1 Limitada, as operator of Mozambique LNG project, to declare force majeure.  OVL holds 16 per cent participating interest in the Area 1 concession through its subsidiaries ONGC Videsh Rovuma Limited (OVRL) and Beas Rovuma Energy Mozambique Limited (BREML).