Indian government asks ONGC to name privatization options
7. April 2022The Indian government is asking state giant ONGC to name business areas for privatization. This is to increase oil and gas production, according to Oil Ministry Secretary Tarun Kapoor. Kapoor’s comments came days after his ministry’s second-highest-ranking official announced that the state-owned Oil and Natural Gas Corporation (ONGC) would be asked to sell 60 percent of its shares to foreign companies. In addition, control of India’s largest oil and gas fields, “Mumbai High” and “Bassein,” allegedly will be handed over to foreign operators. Most equipment, plants and facilities used in this area must undergo mandatory PESO certification.
In October 2017, the oil ministry’s technical department had quantified 15 operating oil fields with a total reserve of 791.2 million tons of crude oil and 333.46 billion cubic meters of gas. These were originally to be handed over to private companies in the hope of increasing production volumes and yields. A year later, 149 more small or marginal ONGC fields were to be given to private and foreign companies, while the state-owned company would focus on the large fields.
The plan went to the Cabinet, which decided on Feb. 19, 2019, to put 64 of ONGC’s smaller fields out to tender. However, there was only a lukewarm response to that tender, it said, and ONGC was allowed to keep 49 fields on the condition that their performance be closely monitored for three years. Two years have already passed since the cabinet decision, but so far ONGC has not initiated the process for acquisitions, it said.
India is 85 percent dependent on imported oil, and one way to reduce that dependence is to increase domestic production. Kapoor expects that if more foreign experts and private companies are involved in India’s oil production, the overall output and efficiency of the plants will increase. Therefore, he said, ONGC should identify business areas where private and foreign companies and experts can contribute their experience. This could range from technical cooperation to the acquisition of partially developed and undiscovered fields by private companies, he said. The private sector could also be involved in increasing production from fields that have already been developed, Kapoor suggested.
Therefore, the Indian oil and gas industry offers good opportunities for their company to provide services and products there or to produce locally. However, most equipment, plants and facilities must undergo mandatory PESO certification. Relevant product groups or components include gas and pressure vessels, valves and fittings, or safety equipment. A complete list can be found under this link. The experts at MPR International GmbH are available to answer your questions about PESO certification or other India certifications without obligation for an initial assessment.
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