Looking for ally

New Delhi, Jan. 17: State-owned explorer ONGC is exploring the possibility of an alliance with US energy major ConocoPhillips.

The “discussions with ConocoPhillips to explore possibilities of any business partnership are at a very nascent stage”, ONGC said.

Industry officials said the state-owned explorer was planning to sign a memorandum of understanding (MoU) with ConocoPhillips for the exploration and development of shale gas and deepwater opportunities in India, North America and elsewhere.

Global energy majors are keen to have participatory interests in India’s oil and gas blocks as demand for energy in the country increases with economic growth.

Reliance Industries sold a 30 per cent stake to BP for $7.2 billion last year in 23 oil and gas blocks to leverage the global player’s technological capabilities.

ONGC is also looking to tie up with a foreign energy firm with technology to develop deepwater finds such as the deepsea UD-1 discovery in KG-DWN-98/2 block in the Krishna Godavari basin.

Sources said ONGC had approached 12 companies working in Southeast Asia including ConocoPhillips of the US, for an alliance.

ConocoPhillips has shown interest in ONGC’s deepwater blocks, the sources added. ConocoPhillips has studied the data of the deepwater blocks.

ONGC, in turn, is keen to tie up with ConocoPhillips, or its affiliates, for shale assets in North America.

This is ONGC’s fourth attempt to get a foreign partner after Petrobras of Brazil, Statoil of Norway and BG Group of UK walked out of its ventures.

Petrobras and Statoil faced delays in getting regulatory approvals for picking up stakes in blocks such as KG-DWN-98/2, while BG withdrew as part of its global strategy.

If talks with ConocoPhillips succeed, ONGC will bring to production dozens of deepsea finds in the Krishna Godavari and Mahanadi basins.

ConocoPhillips is the third-largest integrated energy company in the US and the fifth-largest refiner in the world.