Offshore security won't be PSU burden alone
The Offshore Defence Advisory Group, the agency responsible for offshore security, may be bifurcated to manage security of eastern and western coasts. Private sector representatives may be included in the group.
By Rajeev Jayaswal, TNN |
NEW DELHI: ONGC may soon have to stop paying for rivals safety in deepwaters. The government is considering a proposal to make private sector oilhunters, like RIL, Cairn, Niko and Hardy Oil, share the capital expenditure and operating cost of common security arrangements. At present, ONGC bears the about Rs 100-crore spent on monitoring offshore oil and gas assets.
The move is significant in the light of recent hydrocarbon discoveries in deepwater blocks and emerging global security concerns. These factors are likely to escalate offshore security expenditure manifold in near future.
Earlier ONGC was the only major exploration and production (E&P) company having offshore oil and gas assets, but now private sector’s share has been increasing over the years. ONGC and other PSUs’ share in offshore exploration area stands at 57% (1,021,725 sq km), while the rest is with private sector companies (758,789 sq km).
As private sector’s presence is growing in offshore exploration, it is necessary that the cost for offshore security be shared by all players, petroleum ministry sources said. According to an official, future production sharing contracts (PSCs) between the government and operators may include provisions for security expenses.
The ministry is considering to segregate exploratory blocks from producing blocks for sharing the cost. “This would be required as producing blocks would be entitled for cost recovery,” an official said.
The Offshore Defence Advisory Group (ODAG) may have private sector representation to ensure better co-ordination with operators. The establishment expenditure for ODAG for 2007-08 is estimated at around Rs 1.3 crore. Besides this, expenditure on vessel and traffic management system for the fiscal is estimated at Rs 27.4 crore, an official said.
There is also a proposal to bifurcate the eastern and the western coast operations of the ODAG to ensure better security management.
The government is in the process of setting up statutory regime beyond territorial water. The ad hoc security arrangements need to be streamlined as overall offshore production of oil and gas is likely to go up. At present, ONGC is producing 34.557 MMTOE (76.5%) from offshore areas while private companies and their JVs with PSUs’ share is 10.565 MMTOE (23.5%).
The move is significant in the light of recent hydrocarbon discoveries in deepwater blocks and emerging global security concerns. These factors are likely to escalate offshore security expenditure manifold in near future.
Earlier ONGC was the only major exploration and production (E&P) company having offshore oil and gas assets, but now private sector’s share has been increasing over the years. ONGC and other PSUs’ share in offshore exploration area stands at 57% (1,021,725 sq km), while the rest is with private sector companies (758,789 sq km).
As private sector’s presence is growing in offshore exploration, it is necessary that the cost for offshore security be shared by all players, petroleum ministry sources said. According to an official, future production sharing contracts (PSCs) between the government and operators may include provisions for security expenses.
The ministry is considering to segregate exploratory blocks from producing blocks for sharing the cost. “This would be required as producing blocks would be entitled for cost recovery,” an official said.
The Offshore Defence Advisory Group (ODAG) may have private sector representation to ensure better co-ordination with operators. The establishment expenditure for ODAG for 2007-08 is estimated at around Rs 1.3 crore. Besides this, expenditure on vessel and traffic management system for the fiscal is estimated at Rs 27.4 crore, an official said.
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About Rs 40 crore has already been spent on procurement of immediate support vessels this fiscal.There is also a proposal to bifurcate the eastern and the western coast operations of the ODAG to ensure better security management.
The government is in the process of setting up statutory regime beyond territorial water. The ad hoc security arrangements need to be streamlined as overall offshore production of oil and gas is likely to go up. At present, ONGC is producing 34.557 MMTOE (76.5%) from offshore areas while private companies and their JVs with PSUs’ share is 10.565 MMTOE (23.5%).
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