The state-run explorer ONGC would pay international price for crude oil produced from its marginal fields to the service contractors.
ONGC, which holds about 165 marginal fields (offshore and onshore), enters into service contracts with companies having expertise in developing these fields through a bidding process.
Of the 165 marginal fields, 58 are producing oil and gas and 39 are set to commence production. These have been developed by ONGC. Of the remaining, 26 are to be offered on service contract, while the others are at the appraisal stage.
The board of ONGC approved the terms of the contracts under the new fiscal regime. The new fiscal regime for service contractors dispenses with the price cap of $28-35 a barrel for crude oil produced from these fields.
Thus, the contractors will get international prices, based on the previous monthÂ’s average, for the oil they sell the exploration major.
The oil major hopes to float tenders inviting bids from service contractors to develop these fields shortly.
The 26 fields are in Krishna-Godavari onshore (six), Western onshore (seven) and Western offshore (13).
Marginal fields — that is, those affected by environmental concerns, political issues, access problems, and so on — were awarded to ONGC on nomination basis before the licensing regime. Large amounts of hydrocarbon are locked in these fields.
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