PMO seeks white paper on OVL , future strategy so as to maximise returns

New Delhi: After looking to sell oilfields of Oil and Natural Gas Corp (ONGC), the Prime Minister's Office (PMO) has sought a whitepaper on status and future strategy for the state-owned firm's overseas arm ONGC Videsh Ltd (OVL), sources with knowledge of the development said.

The government had on previous occasions looked at hiving off the highly successful OVL from its parent and monetising it by listing the firm on domestic or international bourses.

Sources said at the meeting called by Prime Minister Narendra Modi to review the oil and gas sector on October 12, the Oil Ministry was asked to prepare an in-house white paper on OVL looking into various issues, including reasons for its establishment, cost incurred and returns till date.

Also, the whitepaper was to look at future strategy of OVL so as to maximise returns and issues related to equity oil (the proportion of production that a concession owner has the legal right to retain).

OVL, which is 100 per cent owned by ONGC, has so far invested Rs 1.5 lakh crore (USD 28.36 billion) in 41 projects across 20 countries. It has under its portfolio reserves of 711 million tonnes of oil and oil equivalent natural gas.

Sources said at the October 12 meeting, which was also attended by Finance Minister Arun Jaitley and Oil Minister Dharmendra Pradhan, a six-member panel headed by NITI Aayog Vice Chairman Rajiv Kumar was set up to look at ways of enhancing output from the existing 66 oilfields that produce about 95 per cent of domestic crude, including by giving out stake to private and foreign companies.

The committee, which also comprises Cabinet Secretary P K Sinha, NITI Aayog CEO Amitabh Kant, Oil Secretary M M Kutty, Economic Affairs Secretary Subhash Chandra Garg and ONGC Chairman and Managing Director Shashi Shanker, would also look at models like outright sale for the remaining 149 oilfields that produce about 5 per cent of domestic crude oil, they said.

At the meeting, Kutty gave a presentation on the status of oil and gas exploration and production in India.

It was suggested at the meeting that the 149 smaller fields could be given out to private and foreign firms and ONGC could concentrate on the big ones where it could rope in technology partners through production enhancement contracts (PEC) or technical service arrangements.

This is the second attempt of by the Oil Ministry to take away some of the fields of state-owned ONGC for giving to private and foreign companies.