Oil and Natural Gas Corp (ONGC) is in talks with oil majors like ExxonMobil, Royal Dutch Shell, British Petroleum, ENI of Italy and British Gas to replace Norway’s Statoil and Petrobras of Brazil who have decided to quit its east-coast KG basin gas block.
“We are talking to a lot of people,” ONGC Chairman and Managing Director, R.S. Sharma said.
ONGC’s prolific east block, KG-DWN-98/2, sits next to the KG-D6 oil and gas block of Reliance Industries Ltd (RIL).
The ONGC block is reported to hold 14.2 billion cubic metres of gas and some 1.1 billion barrels of crude. ONGC holds 65 per cent in the block. Brazil’s state-run oil firm Petrobras and Cairn India Ltd each hold 10 per cent while the remaining 15 per cent is with Statoil.
Hindustan Times had first reported that ExxonMobil engaged in talks with ONGC for its KG basin block. HT had interviewed ExxonMobil Chairman and CEO Rex W. Tillerson in Cancun, who revealed that his company, which is already with ONGC in Russia is keen to team up with ONGC in its east block.
“We are looking at firms for technology (to produce gas from ultra deep sea) and risk sharing,” ONGC Director (Finance) Dinesh K. Sarraf said.
The exit of Statoil and Petrobras, who also specialised in deep-sea production technologies, was more due to government delays in approving their participation in the deepwater acreage.
Despite the exit of these two companies, Sharma said he expects natural gas production from its east coast block to start by 2015-16. However, he added that the current natural gas prices, fixed by the government, were too low to justify fresh investments.