Indian state firms allowed private help with old oil, gas blocks

New Delhi

ENERGY-HUNGRY India will allow state-owned explorers to rope in the private sector to raise production from old fields as the world's third biggest oil importer strives to better exploit its hydrocarbon resources and cut dependence on foreign oil. India is the world's third largest oil consumer and buys about 80 per cent of its supplies from abroad.

Prime Minister Narendra Modi has set a target to cut India's dependence on foreign oil to 67 per cent by 2022. India is looking at raising production from "nomination blocks", or fields handed to state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd after independence, Oil Minister Dharmendra Pradhan said on Monday. The fields are both onshore and offshore. The boards of ONGC and Oil India will be allowed to issue production enhancement contracts and bring in private players to drill some nomination fields, Mr Pradhan said. He said the current fiscal model was not supportive of raising output from nomination fields.

"Revenue was the priority at one point of time but now the government is of the view that the priority is to raise production," Mr Pradhan told reporters at a function to launch the country's second licensing round under new rules.

India has offered 14 blocks under the latest auction and will offer another 23 fields, including five coal bed methane blocks, in the next round later this month. REUTERS