ONGC in oil hunt pact with Exxon
Global energy major Exxon Mobil may jointly bid with state-owned ONGC for hydrocarbon blocks in the coming rounds of oil and gas block bidding.
ONGC on Tuesday signed a memorandum of understanding (MoU) with the US giant, which would offer its expertise to develop oil and gas resources off the east and west coasts, especially deep sea blocks, and also consider joint bidding for open acerage blocks in the country, the Indian company said in a statement.
“This MoU will enable the two petroleum companies to undertake joint technical studies and co-operate in frontier areas like deep water and other petroleum exploration licence (PEL) blocks of ONGC in east and west coast and open acreage for joint bidding,” the statement said.
The MoU was signed on the sidelines of an energy summit here by ONGC director (exploration) R.K. Srivastava and ExxonMobil CEO, South Asia, William P. Davis.
The US-based energy major would later sign a definitive deal after studying the geology of the ONGC blocks, officials said.
The officials said the current MoU was limited to exploratory blocks and there were no proposals to shed equity in ONGC’s blocks. “We may bid jointly in some of the new blocks carved out under the open acreage licence bid rounds,” they said.
The officials said ONGC wanted to bring in an experienced partner to improve its production profile from difficult discoveries (high-temperature, high pressure and deep-water and ultra deep-water blocks). There would be sharing of resources and ONGC’s understanding of domestic geology would be leveraged with the new technology Exxon-Mobil would bring.
The work under the MoU will be carried out in three phases. This will lead to a joint technical study for potential collaboration areas, ONGC said.
ExxonMobil vice-president (Asia Pacific) Michael Deal said: “We welcome the opportunity to work with ONGC and apply our collective expertise to be an even bigger part of India’s bright energy future.”
ONGC chairman Shashi Shanker said: “This meaningful partnership with ExxonMobil will be a step towards unlocking value in ONGC PEL offshore blocks, study open acreage areas and enable us to get closer to meeting the country’s energy aspirations.”
ONGC and ExxonMobil will jointly identify areas to submit bids for more exploration assets in India, he added.
ONGC is investing heavily in discoveries on the east and west coasts. The PSU is currently developing deep water oil and gas blocks in the east coast, which are expected to come onstream by 2020 and produce 15 million standard cubic metres per day (mscmd) of gas at their peak.