ONGC to develop oil fields on its own

Marking a change in its strategy to scour for oil and gas, the Oil and Natural Gas Corporation has dumped a plan to outsource the development of its marginal fields numbering around 96. Barring isolated fields, it will develop the rest on its own.

This means that ONGC will not only look overseas for oil and gas, but will also fully exploit its existing resources by deploying newer technologies.

As part of its strategy, the corporation has decided to conduct studies of its fields for a re-estimate of reserves. "It is possible that after the studies are completed, our reserves in-place may end up higher," an executive said.

At present, ONGC has 96 marginal fields with a potential of 200 million tonnes of oil and 120 billion cubic metres of gas.

These have not been exploited. Extraction from these fields is viable at low capital cost and overheads. Expecting a good response from companies that wanted to take advantage of rising crude prices, ONGC had placed these fields for bidding, only to be disappointed later.

In future, only isolated fields that are not located near the company's current facilities of rigs and floating platforms will be given out on service contracts.

In an attempt to streamline its approach, ONGC plans to divide its offshore fields into three clusters instead of the earlier division of nine.

This classification will depend on the geographical location and producers of crude and gas. Executives said with the cost of floating platforms receding, ONGC would employ more of these for developing its fields.

The decision comes after ONGC got a poor response to tenders called for developing nine clusters of offshore fields. Of these, the company was able to award a development contract for only one cluster.

Of the remaining, tenders were cancelled for one and no bids were received for the rest, senior company executives told Business Standard.

Only two consortiums were in the race for the two clusters that managed a response "" Prize Petroleum with a Malaysian company M-3 and Oil India in a tie-up with Petronas. The bidding for one cluster was cancelled as documents submitted by the companies were not in order.