ONGC decides to bid for fields it gave up earlier.

In a quick u-turn over its earlier decision, state-owned Oil and Natural Gas Corporation (ONGC) has decided to bid for marginal oil and gas fields which it surrendered early this year, as these were uneconomical to develop considering their small reserve size.

Upstream oil companies ONGC and Oil India (OIL) were awarded 165 marginal oil and gas fields over the last few years. They, however, surrendered 69 of these (ONGC surrendered 63) as these were considered non-viable. These blocks are now proposed to be put under the auction route in the next three months.

“Some of the 63 marginal fields surrendered by us could become viable under the new revenue sharing model in auction. When the fields do come for auction, we will do our own financial modelling and definitely bid for them,” ONGC chairman and managing director DK Sarraf said post the company’s annual general meeting (AGM).

The government has decided to move towards a revenue sharing model in the auction of these 69 fields that will also allow contractors liberalised terms, including pricing and marketing freedom. This is a departure from the earlier cost-recovery production sharing contract (PSC) used in the NELP rounds of bidding.

Asked about the progress in talks with Iran over giving the company’s overseas arm ONGC Videsh (OVL) the right to develop Farzad-B gas field in the Persian Gulf and shipping the gas to India, Sarraf said that in a couple of weeks, they would meet Iranian officials for further discussion on the issue.

'In April, we met in Iran and as per discussions, we have worked out a fully integrated proposal, with lots of options, and submitted it to Iranian authorities,' OVL managing director Narendra K Verma said.

Iran, he said, had asked for a plan for developing the field as well as options for taking the gas. A consortium of OVL, Oil India and Indian Oil Corp had discovered the 12.8 trillion cubic feet of gas reserves in the Farsi block in 2008. The discovery was named Farzad-B. In the absence of a concrete development plan, Iran last year listed the block to be put under auction.

With regard to new discoveries, Sarraf said the company has made another discovery in its Bay of Bengal block KG-D5, taking the number of finds in the area to 13.

ONGC discovered oil and gas in the well F-1 in the northern part of the KG basin block KG-DWN-98/2 or KG-D5, which sits next to the flagging KG-D6 block of Reliance Industries. Talking about the present market conditions, the ONGC chief said current oil and gas prices were not 'extremely material for an E&P company for investment decision.'

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