Highly-placed officials in the Gujarat government told The Financial Express that ONGC was indifferent to an offer for joint development of 33 small oil and gas fields in the state. The offer was first made by the state government over a year back, alarmed as it was by the tardy progress being made on the oil and gas production front in the state by ONGC. The sources maintain that not only is ONGC "logging poor recovery rates in Gujarat which hover at around 17-18 per cent compared to the national average of 20 per cent but is also making no attempts to improve its production profile in the state." However, despite repeated attempts to follow up the development of these oilfields, the project has been placed on the backburner.

While sources in the ministry feigned ignorance of the issue and promised "to have it looked into" when contacted, a spokesperson for the ONGC categorically stated that "there is no reason for us to hand over our producing fields to anyone else." As per the details, ONGC's initial oil in place in Gujarat stands at 973 mmt. "Of the 78 oil and gas fields we are operating in the Cambay basin, 60 fields are producing fields, while there is an exploration plan for 2002 during the Ninth Plan period for 11 others, six fields which do not have favourable economics for developing and one field where the gas reserves are over." Alleging that the state government's proposal was more a case of "centre versus state" wherein it wants GSPC to increase production, the ONGC spokeperson said, "Why should we part with fields which are adding to our tonnage?"

According to sources, the proposal had been made by the state government to ensure optimum exploitation of hydrocarbon resources in the state. "Handing over these oilfields to a private operator like GSPC would not only have ensured that these fields are developed optimally and economically but would also have facilitated their expeditious development," said a knowledgeable state government official.

Interestingly, however, the ministry has till date "not been able to give due consideration to the proposal" despite the Gujarat government's repeated reminders. Sources in the state energy department said that while the MOPNG was deferring a decision on the matter on the pretext that it was " a commercial issue" to be resolved between the two corporations, the ONGC, on its part was contending that it was not upto it to decide what fields could be put up for bidding or joint development since "it was a policy matter which has to be decided by the MOPNG as well as the Directorate general of Hydrocarbons." In Gujarat, ONGC had been the sole operator till the entry of the private sector in 1992-93.

However, in the presence of large oilfields like Ankleswar and Gandhar, ONGC has not been able to pay attention to the development of very small oil and gas fields in the state.

A state government communique on the issue points out that "only a few bigger fields are being expeditiously produced by ONGC and the remaining are lagging behind for want of adequate attention by the national oil company."

The communique additionally states that "ONGC due to its size has found operations of small and remotely located fields quite uneconomical", a fact corroborated by the ONGC spokesperson too who however pegged the number of such fields which "do not have favourable economics for developing" at six only. Interestingly, it is these six fields which were put up on the bidding block by the PSU and not surprisingly found not takers.