Tapping oil and gas resources in 165 marginal (small) fields and commissioning ONGC Mangalore Petrochemicals (OMPL) are top on the priority list of Dharmendra Pradhan, the minister of state (independent charge) for petroleum and natural gas.
?The ministry has asked ONGC to submit a proposal on how to bring into production these small fields and the policy changes needed to monetise them,? a petroleum ministry official told FE.
Increasing domestic oil and gas output is the topmost priority of the 44-year-old Pradhan, for which putting marginal fields into production is one of the low-hanging fruits.
The PSU oil and gas major has 165 marginal fields allocated as per the New Exploration Licensing Policy (NELP) regime. Of this, 74 fields are currently put under production. The total output from these fields were recorded at 1.6 million tonnes of crude oil and 3.2 billion cubic metres (bcm) in FY14.
These marginal fields, both on land and offshore, have estimated total reserve in place of 1,510 million tonnes of oil equivalent (mtoe). Of this, nearly 376 mtoe is recoverable hydrocarbon resources.
However, ONGC is finding it difficult to put to production these acreages because under the current circumstances these fields are not ‘economically viable’ at the prevailing hydrocarbon price as volumes are less. As a result, the fields are lying idle and non-remunerative.
?The need of the hour is a remunerative price to utilise higher recovery factor. There are needs to tweak the policy to outsource them to private players,? a senior official at ONGC said.
The ONGC board, under previous chairman and MD Sudhir Vasudeva, had decided to bid out 26 marginal fields comprising six in KG onshore, seven in western onshore and 13 fields in western offshore to private explorers as ‘service contracts’ under a fixed international pricing model. However, fluctuations in net realisation of price because of higher subsidy burden did not allow the government firm a go-ahead.
In FY14, ONGC suffered highest every oil subsidy bill at Rs 56,384 crore. In the last fiscal, the Maharatna firm sold every barrel of crude oil for $106.72. However, it has to bear a subsidy of $65.75/barrel to compensate state-owned oil marketing companies leading to a net realization of just $40.97 a barrel.
Meanwhile, the minister has ordered that OMPL must be commissioned with the next 100 days. The Rs 5,750-crore worth project is already been delayed by more than a year.
OMPL is promoted by ONGC and its subsidiary Mangalore Refinery and Petrochemicals (MRPL), with each holding 49% equity.
According to the initial plan, the project was to be commissioned in the first quarter of FY14.
The complex is integrated with MRPL refinery in Mangalore. The feed stock for the aromatic complex would be supplied by MRPL refinery situated adjacent to OMPL. The complex will process naphtha received into paraxylene and benzene.
The complex is designed to produce 0.9 million tonnes per annum (mtpa) of paraxylene and 0.3 mt pa of Benzene.