The Indian Petroleum Ministry is reportedly urging its state-owned oil company ONGC to divest the majority of its stake in the producing oil and gas fields to foreign companies.
Indian Ministry of Petroleum and Natural Gas exploration additional secretary Amar Nath notified his suggestions to ONGC chairman Subhash Kumar in a letter, reported Press Trust of India (PTI).
In the letter, the state-owned firm has been urged to ‘bring a joint venture partner of international experience and farm out 60% participating interest and operatorship’ of the Mumbai High field.
Nath also urged the firm to consider offering a similar stake in the Bassein and Satellite (B&S) asset to foreign firms.
According to Nath, the Mumbai High and Bassein & Satellite (B&S) offshore assets’ productivity was low under the control of the state-owned firm.
Nath anticipates the redevelopment projects would raise production recovery from 28% to 32% from the mature and continuously declining Mumbai High field.
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Located in the Arabian Sea, approximately 160km west of the Mumbai coast, the Mumbai High field started production in 1976.
Although Mumbai High field has substantial potential to contribute to the country’s production capacity, Nath noted that its infrastructure is ‘ageing and leaking and need replacement/revamping’.
Nath commented: “The ONGC will, however, find this challenging as its improvement/development projects have lagged behind schedule. Procedural aspects and other constraints will not encourage ONGC to take quick decisions.”
By partnering with foreign firms, production from the B&S assets is expected to increase from the current 45% to 70%.
In April 2021, PTI reported that Nath asked ONGC to sell its stake in producing oil fields and outlined an action plan to increase output.
ONGC was urged to consider selling stakes in maturing fields, including Panna-Mukta or Ratna and R-Series in western offshore, and onshore fields.