The declining output of the field has been arrested at a time when ONGC was had begun contemplating divesting in the property. Last year, the national oil company had sought the government's approval for roping in a joint venture partner for the field, unable to tackle the slide in crude oil output on its own.

It even shortlisted seven prospective partners in the venture, that could bring in knowhow about similar oilfields. The Centre however, took some time to ponder over the proposal.

Finally, the Union petroleum ministry sent the ball back in ONGC's court, asking it to put forward a more specific proposal. Meanwhile, McKinsey and Company, which had been engaged to work out an organisational revamp, submitted its report and ONGC decided totest out the new business principles at Neelam.

It also gave a consultancy contract to DeGoyler Magnaughton of the US, to estimate a fair market value of the Neelam field. DeGoyler Magnaughton, which is expected to submit its report shortly, will also estimate the oil reserves and the current surface facilities of the field.

The oilfield was initially estimated to contain 130 million tonne of hydrocarbon reserves, but the dwindling output from Neelam has since raised doubts about its actual reserves. The consultants, engaged in December last year, will also suggest the production pattern of the field, with the current production practices, and with new technologies.

Neelam was chosen as a pilot project for the organisational transformation exercise proposed by McKinsey, in a last ditch attempt to make the oilfield economically viable with in-house efforts. The decline in oil output from the field, which went through a 20 per cent drop in annual production till last year, had since been arrested, sayinsiders.

Experts estimate the decline in output to be barely eight per cent this year. Even last year the output of the Neelam fields exceeded expectations. Neelam produced 1.923 million tonne of crude oil last year, compared to an in-house target for 1.817 million tonne.

This year, the field is expected to yield 1.76 million tonne of crude, of which 0.888 million tonne, or 50.45 per cent, has already been extracted between April and September. The asset management group working on the oilfield is now quite confident of meeting the year's target.

The Neelam pilot project was flagged in August last year, but the asset management team actually went to work in January. The progress at the field, say ONGC brass, was proof of the success of the multi-disciplinary working for integrated reservoir management and the performance management system.

What they mean is that the McKinsey recommendation for creating independent, asset management centres, with greater discretion over policy decisions, intended tofunction as profit centres for ONGC, had worked at the Neelam oilfield. Two similar asset management centres exist for ONGC's eastern and western onshore properties.

Neelam's problems run deeper than just management strategies however. The carbonated field never did rise to ONGC's expectations. Since it went on stream in 1993, the crude output of the oilfield was barely a third of the initial estimate of 90,000 barrels per day. The Neelam production is believed to have stabilised at around 38,000 barrels per day now.