Don’t hoard resources as it belongs to common citizen, Oil Minister Pradhan tells ONGC

Asserting that government will not allow ONGC to hoard resources, the Union Petroleum and Natural Gas Minister Dharmendra Pradhan on Tuesday said that policy guidance has been given to ONGC to monetise its assets. He also cautioned that Centre would intervene and bring such resources to the market if ONGC were to refrain from acting on this policy guidance.

“The biggest state-owned company has had a sizeable number of acreages for years. But the government cannot allow you to hoard the resource because it belongs to the common citizen of the country,” Pradhan said at BloombergNEF Summit.

“We have given policy guidance to the state-owned company that either you do it on your own through a new partner or economic model or after a particular period the government will intervene. Using its authority, the government will bring that resource to the market,”.

“Some of our companies have been rising to the occasion. They will do it,” Pradhan added.

The Ministry of Petroleum & Natural Gas wants the public sector energy giant ONGC to reassess its role with an ultimate aim of becoming a resource owner, functioning like a holding company.

“ONGC, being the flagship central public sector enterprise, has grown manifold and has resources, (but) it has not explored aggressively,” a senior official has told BusinessLine. “Further, the engagement of ONGC on a large number of small fields has reduced its flexibility and project implementation capability. Today 80 per cent of ONGC’s production comes from only 24 fields, while remaining 190 fields contribute only 20 per cent.”

Demand recovery

Meanwhile, India’s fuel consumption will reach pre-pandemic levels by the end of the calendar year, Pradhan said.

“During the past three weeks of June there is again a sign of demand resurgence due to lifting of lockdown and gradual economic movement picking up,” Pradhan said. “We are confident that we will be in a robust position to restore our original consumption behaviour by the end of 2021.”

However, India has exhausted its strategic crude oil reserves as crude prices have been rising for the past few months, he added.

“Our strategic storage has a capacity of 9.5 days. Taking advantage of last year’s opportunity, we filled it up. We also store some as floating storage at refinery, pipeline, and purchase ends. In the last few months, we have already exhausted that,” he said.