Policy for Marginal Fields of ONGC and OIL Major expansion of role of private sector in oil and gas

Policy for Marginal Fields of ONGC and OIL 
Major expansion of role of private sector in oil and gas 

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its approval to the Marginal Fields Policy (MFP), for development of hydrocarbon discoveries made by national oil companies; Oil & Natural Gas Corporation Ltd. (ONGC) and Oil India Ltd. (OIL). These discoveries could not be monetized for many years due to various reasons such as isolated locations, small size of reserves, high development costs, technological constraints, fiscal regime etc. 


Under the new policy, 69 oil fields which have been held by ONGC and OIL for many years, but have not been exploited, will be opened for competitive bidding. Under this policy, exploration companies will be able to submit bids for exploiting these oil fields. These oil fields have not been developed earlier as they were considered as marginal fields, and hence were of lower priority. With appropriate changes in policy, it is expected that these fields can be brought into production. In keeping with the principle of `Minimum Government Maximum Governance’, significant changes have been made in the design of the proposed contracts. The earlier contracts were based on the concept of profit sharing. Under the profit sharing methodology, it became necessary for the Government to scrutinize cost details of private participants and this led to many delays and disputes. Under the new regime, the Government will not be concerned with the cost incurred and will receive a share of the gross revenue from the sale of oil, gas etc. The second change is that the licence granted to the successful bidder will cover all hydrocarbons found in the field. Earlier, the licence was restricted to one item only (e.g. oil) and separate licence was required if any other hydrocarbon, for example, gas was discovered and exploited. The new policy for these marginal fields also allows the successful bidder to sell at the prevailing market price of gas, rather than at administered price. 

This decision is expected to stimulate investment as well as higher domestic oil and gas production. 

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Reimbursement of losses incurred by NAFED, PEC, STC and MMTC for import of pulses and sold in the domestic market under the 15 percent reimbursement Scheme 

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the proposal of the Ministry of Consumer Affairs, Food & Public Distribution, to reimburse Rs.113.40 crore of losses on pulses imported between 2006-2011 by the National Agricultural Cooperative Marketing Federation (NAFED), Project and Equipment Corporation (PEC), State Trading Corporation (STC) and Metals and Minerals Trading Corporation (MMTC), apart from losses incurred in the sale of pulses upto six months after closure of the scheme. This will enable the Central PSUs to intensify trading activities to cool down prices. 

In order to ensure retail distribution to the consumers, it was decided to import 5000 tonnes of Tur Dal and 5000 tonnes of Urad Dal by MMTC, a Central PSU. The first consignment of imported Dal would be reaching Mumbai by 5.9.2015. 

The Union Government has taken several measures to increase availability and control the price of essential commodities, especially pulses and onions. States have been empowered to impose stock limits on pulses, export of all pulses is banned except Kabuli Chana, organic pulses and Lintels to the tune of 10,000 MTs. Besides there is zero duty on import of pulses.