The oil ministry has formed all-powerful review committees to monitor performance of ONGC and Oil India. They will have the power to relinquish any oil and gas field for auctioning to private firms.
Being dubbed ‘super-boards’, the committees will be headed by the ministry’s upstream nodal authority Directorate General of Hydrocarbons (DGH), and will review and monitor performance in areas given to Oil and Natural Gas Corp. Ltd. (ONGC) and Oil India Ltd. (OIL) on nomination basis.
The two panels, one each for ONGC and OIL, will review these areas: annual work programme and budget, declaration of a discovery as commercial, reservoir and production performance, monitoring of development activities, and collaborations with other explorers.
“The advice/decision of the Review Committee shall be implemented forthwith by the NOC (National Oil Company) concerned and the progress of implementation shall be reported to the Review Committee through DGH at its next meeting,” the order dated May 25 quoted Atanu Chakraborty, director general, DGH, as saying.
“They have all the powers to do so. We have to live with it,” said a senior official at one of the two explorers. “If they want to create a ‘super-board’ so be it,” he said.
The order follows the ministry’s unhappiness with state explorers particularly on delays in projects linked to output enhancement. It has already ordered a detailed review of board of directors of ONGC for a possible revamp of the functional heads.
The panels will be headed by DG, DGH and will have two other members from DGH - one Deputy DG and another head of Division in charge of NOCs-monitoring. One representative of ONGC or OIL not below the rank of director will be nominated by the NOCs.
Also, the manager of the asset that is under review would be co-opted as member of the committee, the order said.
ONGC produced 86 per cent of its 26.13 million tonnes of crude oil in financial year 2016-17 from fields given to it on nomination basis. Natural gas production from nomination fields accounted for 93 per cent of the total output of 25.34 billion cubic meters.
In the order for ‘Constitution of Review Committees for Management of Oil and Gas Resources of Nomination Fields of National Oil Companies (NOCs)’, Chakraborty said the panels are being constituted drawing from powers given to DGH by the oil ministry orders.
The order for the constitution of the committees will “come into force with immediate effect,” he said.
The review committee will meet at least once every three months.
The powers of the panels include “annual work programmes and budgets in respect of exploration operations and any modification and revisions thereto” and “annual work programme and budgets in respect of development and production operations and any modifications and revisions thereto.” It will also review “proposals for surrender or relinquishment of any part of the area included in the nomination field.”
Fields relinquished by NOCs are auctioned to private firms by the government. The first such auction was concluded last financial year, with 67 fields relinquished by ONGC/OIL being put on sale.
“Performance of non-producing/sub-optimally producing” fields as well as “reservoir and production performance of producing fields” would also be reviewed by the panels, the order said.
Field development plans (FDP) and feasibility reports of commercial discoveries in nomination fields, and monitoring of development activities for early monetisation will also fall within the ambit of the committees.
“Proposals for ‘field surveillance’ by DGH for better reservoir management” will also be under preview of the committees, the orders said, adding collaboration with licensees or contractors of other areas would be as reviewed.
Also, proposals for an appraisal programme or revision, declaration of a discovery as commercial discovery along with proposed development areas will be function of the panels.