State-owned Oil and Natural Gas Corp (ONGC) has managed to save its golf courses in Ahmedabad and Vadodara after the department of disinvestment dropped a proposal to divest the company of the 'non-core' assets, sources said.
The Department of Investment and Public Asset Management (DIPAM), erstwhile called the department of disinvestment, had in May 2019 decreed golf courses and sports clubs owned by central public sector enterprises as non-core assets and wanted them to monetise them.
It listed ONGC’s two golf courses in Ahmedabad and Vadodara as non-core assets that needed to be sold to private developers to raise money for the government.
But the Ahmedabad golf course was in the middle of an oilfield and had oil wells.
Sources privy to the development said DIPAM dropped the two golf courses from its list a few weeks back after ONGC made a case of how selling them would mean also handing over producing oil wells to a private developer.
Also, ONGC stated that the golf courses were on land that it does not own.
The land is on a long lease from the local municipal corporations and land that the company does not own cannot be sold, they said.
The 9-hole Ahmedabad golf course sits in the middle of ONGC-operated 15.69 square kilometre Motera oilfield. Two of the five wells on Motera oilfield are housed in the golf course.
Motera produces 245 barrels of oil per day and 16,000 cubic metres per day of gas.
Sources said ONGC told DIPAM that the Ahmedabad golf course was a producing, revenue generating asset that cannot be classified as a non-core asset.
Last year, DIPAM in an exercise to assess land banks and other non-core assets of government departments as well as central PSUs identified two of ONGC’s golf courses in Ahmedabad and Vadodara, as also a sports club owned by Bharat Petroleum Corp Ltd (BPCL) in Chembur, Mumbai.
Sources said the exercise identified only properties with real estate potential in prime cities while leaving out golf courses ONGC has in Ankleshwar in Gujarat and Rajahmundry in Andhra Pradesh.
It also did not prioritise the grand golf course Oil India Ltd (OIL) has in Assam and one ONGC has in the North-East.
While the golf courses are used by executives of the PSUs for playing the leisurely game and hosting their business partners, ONGC had built the one in Ahmedabad after it struck oil in the city more than two decades back.
After the Motera field was discovered in Ahmedabad, ONGC was wary of encroachment around the oil wells in a city that was developing into a megapolis. So it built a golf course around the wells to ward off encroachers, they said.
Also, the Motera field lies in a nomination block that according to rules cannot be sold off to outsiders.
DIPAM has now taken off the two golf courses from its list, sources said adding also BPCL is now bound for privatisation and the new owner of the company will decide the fate of the club.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
