ONGC's Ahmedabad golf course: Buyer to get oil wells free?

NEW DELHI: Freebies have so been limited to groceries and consumers goods. But a recent government move asking flagship explorer ONGC to sell a golf course in one of its fields in Gujarat could lead to a similar situation where the state-run company may end up giving away producing oil wells.

The Department of Investment and Public Asset Management (DIPAM) wants ONGC to sell golf courses in Ahmedabad and Vadodara as well as Bharat Petroleum Corporation Ltd’s sports club at Chembur in Mumbai.

This is part of the government’s strategy to spur investment cycle in the country by forcing public sector entities to monetise non-core assets and invest the money into creating new infrastructure. But the list of non-core assets does not include ONGC’s teeing greens at Ankleshwar in the state and Rajahmundry in Andhra Pradesh as well as Oil India Ltd’s sprawling course in Jorhat as these are perceived to have low real estate potential, unlike the Ahmedabad and Vadodara greens.

In ONGC’s case, DIPAM appears to have overlooked the fact that the Motera field in Ahmedabad has four wells, at least two of which are producing oil. Besides, Motera is also among a bouquet of 64 small fields ONGC is offering to private players to operate so that it can concentrate on large assets.
The field lies in a block licensed to ONGC under the nomination policy that existed before the government began auctioning acregaes in 1999. This has put ONGC in a quandary as the existing rules governing nomination blocks do not allow the licensee to sell or transfer land ownership.
ONGC, for example, will remain the licensee and retain ownership even after inducting a private partner to operate the field. But if the golf course land is sold for development, the buyer will get the ownership of the wells.
Company executives said the Motera golf course lies in a corner of the block and was built to ward off encroachment as the city expanded. Shrinking buffer zone due to encroachment due to expanding city limits is a common problem around oil installations. This was one of the reasons contributing to high toll during a 2009 fire at the IndianOil depot near Jaipur.

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