Comments
American oilfield-service company Schlumberger Ltd’s lone bid for boosting production from Oil and Natural Gas Corporation’s (ONGC’s) older oil fields will have to meet certain parameters before getting a final nod.
“Schlumberger is the lone bidder for the Geleki field (Assam). This is not the first time we will be working with a single bidder…The award of the contract will be subject to them meeting certain parameters,” an official aware of the bid told BusinessLine .
“The bidding out of Production Enhancement Contracts (PECs) will vary from field-to-field and participants will have to meet the requirements specified before final award,” the official added.
India’s domestic oil production has been on a decline despite rising consumption. Crude oil production in India stood at 28.8 million tonnes from April to January 2018-19. This stood at 29.9 mt during the same period of last financial year. On the other hand, total consumption of petroleum products stood at 176.1 mt during the period under review. This stood at 170.8 mt during the same period of last fiscal.
ONGC and Oil India had drawn up plans to boost domestic oil and gas production from aged fields in late 2016. Both PSUs had initially forged agreements with Schlumberger and Halliburton. Under the initial agreements, both were offering the contractors a share of the incremental oil production from these older fields.
This procedure was red flagged after which ONGC and OIL had to draw up plans to bid out these contracts. In 2018, ONGC had shortlisted Schlumberger, Halliburton and GE subsidiary Baker Hughes to raise output from the Kalol field in Gujarat and the Geleki field in Assam to participate in the bidding process.
Under the 15-year Production Enhancement Contract, the oilfield service producer will bring in technologies and invest in capital and operating expenditure to increase production from the existing baseline output.
They will be paid a fee for incremental production beyond the routine (baseline) production. This baseline (or expected production if the contractor was not brought in) will be estimated by ONGC and vetted by a third party.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.