Oil and Natural Gas Corporation (ONGC) is hopeful of completing sale of minority stakes in three of its coal-bed methane (CBM) assets located in Jharkhand and West Bengal to private players this fiscal.
Once these deals are completed, the private companies will play a key role in developing the CBM assets. CBM is a form of natural gas extracted from coal beds.
The explorer recently finalised a draft agreement outlining the responsibilities of both sides in implementing the projects, say sources. The agreement will be signed once ONGC board approves the same by the end of this month or early next month.
ONGC plans to sell a 25 per cent stake each to Great Eastern Energy Corp and Deep Industries, respectively, in Ranigunj and North Karanpura blocks.
In Bokaro, the company is expected to sell a 35 per cent stake to Dart Energy (25 per cent) and Jindal Petroleum (10 per cent).
ONGC currently holds 90 per cent operating interest in Ranigunj and 80 per cent each in Bokaro and North Karanpura. Coal India (Ranigunj) and IndianOil (Bokaro and North Karanpura) holds the residual stakes as participatory interests.
The company identified the prospective partners in May last year. However, share transfer was delayed as the deal was not finalised.. Also, the prospective partners wanted ONGC to reduce its overhead in assets, as a precondition to enter the deal.
Though none of the assets has reached the production stage, ONGC has made huge investments and deployed a large pool of its employees in the CBM hunt.
According to the latest plan, ONGC has agreed to bring down its manpower in each of the blocks in a phased manner to keep a leash on expenses.