New Delhi: In a significant development for India’s upstream oil sector, the Government has advised Oil and Natural Gas Corporation (ONGC) to assume control of the CB-OS/2 offshore block located on the west coast of India. The move comes after the Ministry of Petroleum and Natural Gas declined to extend the Production Sharing Contract (PSC) with the current consortium of contractors, Vedanta Ltd. and Tata Petrodyne Ltd.
PSC Extension Denied to Existing Consortium
In a communication to the existing operators, the Petroleum Ministry made it clear that the consortium’s request for a PSC extension was not accepted. The block was awarded under a pre-NELP PSC on June 30, 1998, and was later granted a Petroleum Mining Lease (PML) in 2002 after the commercial discovery of oil and gas.
Lakshmi and Gauri Fields Still in Production
The CB-OS/2 block comprises the Lakshmi and Gauri fields, which are still producing approximately 3,400 barrels of oil per day (bopd) and 340,000 standard cubic meters per day (SCMD) of gas. These production numbers highlight the continued strategic value of the block even after more than two decades of operation.
ONGC’s Role: Interim Measure to Protect Reserves
According to a regulatory filing, the government’s instruction to ONGC to take over petroleum operations is described as a “purely interim measure.” The aim is to ensure uninterrupted operations, protect national petroleum reserves, and maintain energy security, while preparations are made to re-award the block to another party.
The move is said to be in public interest, emphasizing the government’s commitment to safeguarding natural resources during contractual transitions.
ONGC Shares React Positively
Following the news, shares of ONGC saw a marginal uptick on the Bombay Stock Exchange (BSE), trading higher at ₹236.90, up 0.089%. Market analysts view the takeover as a short-term operational opportunity for ONGC, though it may have limited material impact on the company’s overall production volumes.
About ONGC
Indian Oil Corporation Limited (IOCL), a Maharatna PSU under the Ministry of Petroleum and Natural Gas, is India’s largest downstream oil company. IOCL operates extensive refining, distribution, and marketing networks and is committed to safe, efficient, and sustainable energy operations.
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