Sharma: New move

New Delhi, Aug. 31 (PTI): After Norway's Norsk Hydro, Italy's Eni and Brazil’s Petrobras, the Oil and Natural Gas Corporation (ONGC) has tied up with British oil major BP Plc for oil and gas exploration and production in India and abroad.

“We need expertise and BP has domain knowledge of E&P business,” ONGC chairman and managing director R. S. Sharma said after the two companies signed a memorandum of understanding (MoU) here today.

The MoU is for collaboration in exploration and production (E&P) business in India and abroad.

This includes participation of the ONGC and BP in each other's overseas and local assets such as coal bed methane blocks in India.

ONGC director D. K. Pande and BP president Steve Peacock signed the MoU.

Sharma said the ONGC was looking at partnering BP in some of the British firm's overseas properties in Russia and Latin America. “We also want them to bring their expertise in deep sea blocks we have in India.”

The ONGC has had a dismal track record in finding oil and gas reserves in the deep sea.

With only 8 of the 40 wells drilled during its ambitious multi-billion dollar deep-sea hunt, code-named Sagar Samridhi, the public sector upstream oil company is now sewing alliances with global energy majors to improve its chances.

It had previously given equity in its best bet, the KG-DWN-98/2 block that lay adjacent to Reliance Industries' prolific 50-trillion cubic feet gas block in the Krishna Godavari basin off the east coast, to Norsk Hydro of Norway and Brazil’s Petrobras.

It has joined hands with Eni of Italy for separate eastern offshore blocks.

“Besides, we are also looking at collaborations in production of CBM,” Sharma said.

Both BP and ONGC have won areas for exploiting gas from below the coal seams and the MoU provides for possible collaboration.

“The MoU envisages possible participation in each other's acreages in India and abroad, including offshore licences and CBM acreages in India. The MoU also provides for joint bidding by ONGC and BP for the exploration acreages in India and abroad,” an ONGC press release said.

The agreement is valid for an initial period of 18 months, which can be extended by mutual agreement.

Sharma said both the oil majors had varied experiences in exploration and production business and this synergy would give competitive advantages to both entities in global operations.