ONGC seeks foreign partners for Mumbai High oilfield as output falls

ONGC seeks foreign partners for its output-declining Mumbai high oilfield, offering a cut in revenue and a fee instead of trading equity, to retain ownership

Oil and Natural Gas Corporation (ONGC) is seeking foreign partners for its flagship Mumbai High field due to declining outputs, PTI reported.

ONGC is India's top oil and gas producer.(Reuters)

In return, the oil giant is offering a share of revenue from increased production with a fixed fee over a 10 year contract, but no equity stake. Bids are due by September 15, 2024.

ONGC had floated an international tender on June 1, seeking global technical services providers (TSPs) with an annual revenue of at least 75 billion USD (Rs.6.26 lakh crore), according to the tender document.

The TSP would have to do a comprehensive review of the field performance and identify improvements as well as implement suitable technological interventions and practices for improving production and recovery, it said.

The Mumbai High field (previously Bombay High field), India's largest oil field, lies 160-kilometer in the Arabian Sea off the Mumbai coast. It was discovered in February 1974 and started production on May 21, 1976, the report read.

The field hit a peak of 4,76,000 bpd (barrels per day) and 28 bcm (billion cubic meters) of gas in 1989 and has since seen a gradual decline in output.

It is currently producing 1,34,000 bpd of oil and 13 bcm (less then 10 million standard cubic meters per day) of gas, accounting for almost 38 per cent of India's production and 14 per cent of consumption.

ONGC believes the field still has a balance reserve of 80 million tonnes (610 million barrels) of oil and over 40 bcm of gas and hence, needs partners who can help tap them.

With the field seeing a steady decline in output, a stake sale had been considered on at least two occasions in recent years.

ONGC had previously resisted considerations to sell the Mumbai high and Bassein oil fields; A Niti Aayog recommended stake sale in 2018, and two oil ministry suggested sales of 60% stake in 2021, according to PTI. The TSP model was come up with, as a means to improve production without giving away ownership and control.

ONGC produced a total of 18.4 million tonnes of crude oil in the financial year 2023-24, down from 18.54 million tonnes in the previous year. Gas output declined 3.2 per cent to 19.974 bcm, the report read.

ONGC contributes around 74% of India's crude oil and around 63% of its natural gas production, according to an S&P global report.