The Indian Ministry of Petroleum and Natural Gas has reportedly told state-owned oil and gas producer ONGC to sell its stake in producing oil fields.
According to a Press Trust of India (PTI) report, the ministry’s additional secretary (exploration) Amar Nath wrote a letter to ONGC chairman and managing director Subhash Kumar this month outlining an action plan to increase output.
The seven-point action plan called on ONGC to consider divesting its stake in maturing fields such as Panna-Mukta or Ratna and R-Series in western offshore and onshore fields, including Gandhar in the state of Gujarat.
The plan also advised the oil and gas company to partner with foreign players for gas-rich block KG-DWN-98/2, Ashokenagar block in West Bengal and Deendayal block in the KG basin.
The petroleum ministry was also in favour of ONGC creating separate entities for drilling, well services, logging, workover services and data processing entities.
The letter comes as ONGC’s crude oil production dropped to 20.2 million tonnes in the fiscal year ending 31 March, from 20.6 million tonnes in the previous fiscal year.
Annual gas production also dropped from 23.74 billion cubic metres (bcm) in 2019-2020 to 21.87 bcm in 2020-21.
The action plan aims to increase ONGC’s oil and gas production by one-third by 2023-24.
In February, ONGC signed a two-year contract for Vantage Drilling International’s ultra-deepwater drillship, Platinum Explorer.
The new contract is expected to yield revenue of around $109m, excluding service tax, for Vantage.