ONGC seeks partners to raise output from 64 small fields

State-owned Oil and Natural Gas Corp (ONGC) Friday invited proposals from firms willing to partner with it in raising oil and gas production from its 64 marginal fields.

These 64 fields have been clubbed into 17 onshore contract areas that have a cumulative 300 million tonne of oil and oil equivalent natural gas reserves, the company said in a statement here.

ONGC wants partners who can raise output beyond a pre-agreed baseline and will share revenues from such incremental production with them.

"Salient features of the ONGC offering (include) complete marketing and pricing freedom to sell oil and gas on arm's length basis through competitive basis," the statement said.

The contractor will be selected on a revenue sharing basis. "The revenue will be shared on incremental production over and above the baseline production under Business-As-Usual (BAU) scenario," it said.

Contract period will be for 15 years with an option to extend by 5 years.

ONGC invited bids under the production enhancement contract (PEC) from the interested companies who can bring in technology for raising the output. The company will hold a pre-bid meeting on September 17 and bidding will close on December 20, 2019.

The government has been unhappy with ONGC over its stagnant oil and gas production and inducting partners in small and marginal fields was a way of raising output that was agreed to in a meeting with Prime Minister Narendra Modi on the issue last year.

ONGC had previously experimented with PEC contracts for two fields but has not been able to select a partner because of receiving conditional bids.

The latest PEC tender is on more liberal terms.

There will be a reduction of 10 per cent in the royalty rate for additional production of natural gas over and above BAU scenario.

ONGC said exploration will be permitted during the contract period including the right to explore all kinds of hydrocarbon.

"Contractors will not be required to reimburse any expenses already incurred by ONGC," it said. "Incentives shall be available for achieving production higher than the committed incremental production."
"The offer shall allow interested companies to participate in the International Competitive Bidding (ICB) process," it said. "Companies, either alone or in consortium or joint ventures, may bid for one or more contract areas. The bidders are required to fulfill the requisite technical and financial criteria and the bids would be evaluated on the basis of revenue sharing from the incremental oil and gas production."