Upstream oil firms increase tech focus, seek contract reforms

New strategy to revive ageing fields

- ARUNIMA BHARADWAJ

DECADES OF INCREMENTAL policy reforms by India to attract investments by Big Oil haven't yielded the intended outcome.

National hydrocarbon production has stagnated over recent decades, and import dependence for oil has remained the most obvious macroeconomic vulnerability for the country.

Thankfully, this has of late led to a subtle policy shift. As many of once-prolific oil fields have matured, and are depleting fast, state-run oil companies aswellas private players are giving a renewed emphasis on assimilating cutting-edge technology for production enhancement as wellas exploration.

This is being done both by augmenting indigenous R&D and through tech partnerships with foreign oil companies.

Experts say advanced oil recovery technologies could unlock billions of barrels from India’s ageing oil fields. While they recognise a change in policy where tech capital is preferred over the elusive external finance, a few policy bottlenecks are being highlighted. Fiscal uncertainties too are holding back the investments needed to deploy new technologies, industry players feel.

More importantly, contractual hurdles continue to stall entry of foreign players as technology suppliers.

“Global majors or tech companies can be hired asa service provider to provide a specific service (e.g., enhancing production from a mature field) fora fee. The fee can bea share of the incremental revenue generated ora fixed per-barrel fee,” said Sanjay Sah, partner, Deloitte India.

He added that while such arrangements have been initiated by the national oil companies, as in ONGC’s tieup with bp, these can be scaled up significantly.