The government is set to come out with a new policy aimed at increasing oil production from nomination blocks of Oil and Natural Gas Corporation (ONGC) and Oil India (OIL), sources in the know said.
The proposed policy would encourage private sector investment and help bring in world-class exploration and production technologies.
“The production enhancement policy will go for inter-ministerial consultation soon and is likely to come up for Cabinet clearance within a month. We expect the enhanced oil recovery (EOR) policy to be presented before the Cabinet in two months,” said a source, adding that the petroleum ministry would take opinions from the finance ministry, the law ministry, and the NITI Aayog in this regard.
EOR techniques are used to extract more crude from depleting fields by using gas, heat or chemical injections to push up oil from difficult traps. The capital-intensive process will now get push from the private sector, too, as part of the larger road map by Petroleum Minister Dharmendra Pradhan to increase hydrocarbon production in India.
“Through the policy, the government’s aim is to maximise production from mature fields, encourage private and foreign investments, infusion of best-in class management practices, and infusion of world-class exploration and production technologies,” the source said.
The two models that are under consideration are farm-in model and technical services model. The policy will be applicable for 61,851 square kilometres allotted to national oil companies ONGC and Oil India on a nomination basis. This comes at a time when the country’s oil and natural gas production is going down. Crude oil production was 3019.94 thousand tonnes (TMT) during August, 1.56 per cent lower as compared with the corresponding month last year. Natural gas production, on the other hand, was 2772.94 million standard cubic meters (MMSCM), 3.69 per cent higher than August last year. Also, refinery production was seen 0.79 per cent up at 20451.48 TMT compared to August 2016. The small and marginal fields of ONGC and Oil India were already allotted to private players in the discovered small field round, which included 23 onshore and seven offshore blocks.
The much-awaited second round of bidding for discovered small and marginal fields, set to take place in October, will offer about 60 blocks, a move that can be seen as a booster dose for the new entrants in the hydrocarbon sector.
India is the third largest consumer of oil and petroleum products after the US and China. The country’s share of global demand is expected to grow from current 5.5 per cent to 9 per cent by 2035.