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bassein: Oil ministry tells ONGC to cede Mumbai High, Bassein fields to foreign cos


NEW DELHI: In a move harking back to the days of P V Narasimha Rao’s government, the oil ministry has asked state-run ONGC to cede ownership and control of the Mumbai High as well as Bassein and its satellite fields to foreign companies with a view to raising production. On October 28, additional secretary (exploration) in the ministry Amar Nath wrote to ONGC chairman Subhash Kumar saying the company give away 60% PI (participating interest) in these fields and operatorship to international partners as the current production was low. Mumbai High is the country’s crown jewel and Bassein the largest gas source. The offshore fields together account for 50% of domestic gas and over 23% of oil production. Nath’s letter draws on a move made during Rao’s government when Satish Sharma was the oil minister. On March 31, 2004 TOI had reported how a two-member committee set up in 1992 by ONGC, which was then a commission and the government exerted greater control over it, had recommended handing over Bombay High to another company to operate. That committee was set up to examine a proposal from US exploration major Occidental, which sought to operate the field in return for some investment. The plan was scuttled by a whistleblower. In the latest instance, the sales pitch has been expanded to include Bassein and its satellites. This is the second time since April that Nath, who joined the ministry as joint secretary (exploration) in 2014 and is the longest-serving government director on the ONGC board, has pushed the company to hive off producing fields. He also repeated the recommendation to hive off ONGC’s in-house drilling and technical services departments, which will raise costs and leave the company at the mercy of private service providers. Nath’s main argument is that global majors will be able to raise production from ONGC’s ageing fields with their expertise and technology. In his letter, Nath argues that improving or replacing ageing infrastructure will be a challenge for ONGC as it will not be able to take quick decisions due to the procedural aspects of decision-making. Nath’s letter ignores the fact that the procedural aspects are all set by government statutes in a parliamentary system. He also wrongfully states that ONGC has been able to recover only 45% of the Bassein reserves. The fact is that 65% has been produced from Bassein, the oldest field, while output from satellites was ramped up gradually as they came to production sequentially.


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