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Oil Ministry to Intensify Monitoring Mechanism for Better Efficiency in ONGC and Oil Fields

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The oil ministry has intensified monitoring of oil and gas fields of state-owned firms like Oil and Natural Gas Corporation (ONGC) to avoid slippages in domestic output derailing the target of cutting import reliance by 10% by 2022.

The directorate general of hydrocarbons (DGH) in the last few weeks has issued specific directives to ONGC and Oil India Ltd (OIL) to submit daily field-wise production report as well as periodic reservoir management reports, the orders said.

In March 2015, Prime Minister Narendra Modi had called for cutting India’s dependence on imports to meet oil needs by 10% by 2022, from 77% then. However, India’s import dependence has since only risen to 81%.

While output as well as investments by private firms have all but dried up, oil minister Dharmendra Pradhan sees raising production from fields given to state-run firms on nomination basis, or without bidding, as key to achieving the target.

On 25 May, the ministry offered all-powerful review committees headed by its upstream technical arm DGH, to monitor performance of ONGC and Oil India, and having powers to relinquish any oil and gas field for auctioning to private firms.

The scope of panels’ review will include annual work programme and budget, declaration of a discovery as commercial, reservoir and production performance, monitoring of development activities and collaborations with other explorers.

“The advice/decision of the review committee shall be implemented forthwith by the NOC (national oil company) concerned and the progress of implementation shall be reported to the review committee through DGH at its next meeting,” the order issued by Atanu Chakraborty, director general of DGH said.

DGH followed it up with a 21 June order asking NOCs to submit “at the end of each day, data relating to daily production for each field” as well as on the second day of every month “the provisional production data for the preceding month” and “the reconciled monthly production data for each month on or before the tenth day of the following month.”

In a 11 July order, it asked the NOCs to submit details of reservoir production and performance data on a half-yearly basis and in-place reserves in each of the fields on a yearly basis.

Besides seeking all technical data on reservoir performance, it asked NOCs to immediately notify any discovery and detailed timelines for subsequent processes like declaring a find commercially viable and submission of a field development plan.

“If the NOC declares the discovery as a commercial discovery, then within 200 days (for oil) and 365 days (for gas), the NOC shall submit to DGH for the purpose of review and advice by the review committee, a comprehensive field development plan (FDP)/feasibility report (FR),” the 11 July order said.

For previous discoveries, it wanted a quarterly status report.

ONGC produced 86% of its 26.13 million tonnes of crude oil in 2016-17 fiscal from fields given to it on nomination basis. Natural gas production from nomination fields accounted for 93% of the total output of 25.34 billion cubic metres.

Pradhan had at an industry event in June stated that oil recovery from reservoirs internationally is 35-40% and that for gas is 55-70%.

“In India, the current recovery factors of ONGC and Oil India for crude oil are as low as 27% and 23%. In case of natural gas, it is 54% and 43% for ONGC and Oil India, respectively,” he had said.

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