Petroleum Minister Mani Shankar Aiyar's "inward diplomacy" proposal, urging international oil companies to invest in the domestic oil major's nomination blocks, seem to have met with opposition from within Oil and Natural Gas Corporation.
The ONGC executives maintain that more investments should be channelled into the unexplored sedimentary basins of the country.
On the other hand, Aiyar told Business Standard the government would open up the nomination blocks held by the ONGC for investment by foreign companies.
The minister said the average recovery rate of ONGC was far below international standards and bringing in foreign partners would help matters on this front.
Besides their contrasting viewpoint, ONGC executives also pointed out the legal hurdles, which would have to be removed before giving out nomination blocks to other companies.
The country has 26 sedimentary basins, of which the ONGC has made discoveries in five. An ONGC executive said only one sedimentary basin had been discovered outside the ONGC-fold, at Digboi in the Assam Arrakan basin, by the erstwhile Assam Railway and Trading Company in 1890.
But the petroleum ministry has decided to direct oil diplomacy efforts into the domestic sector, especially in the exploration and production stream. Aiyar said his ministry would concentrate on oil diplomacy which was "inner directed".
This means that besides seeking oil and gas blocks and refining investment opportunities abroad, the ministry wants technological tie-ups along the entire chain of petroleum activities, especially E&P.
On the issue of political opposition to the opening up of the nomination blocks, Aiyar said, "I believe that there is a consensus between the Left (in which I include myself) and us (the ruling United Progressive Alliance), where I sometimes find myself in minority, on this issue."
He added that just because the Left had reservations on foreign direct investment in retail did not mean it would object to foreign investment in the petroleum sector.
The government had granted production and exploration licences to the ONGC for about 114 blocks in the country when it was not a company but was Oil and Natural Gas Commission. A small number of blocks, mainly in the Assam Arakkan basin, were allotted to the other public sector player, Oil India Ltd.
