The Hindu Business Line : ONGC confident of Shell role in Kalol project

ONGC hopes to overcome the hiccups pertaining to commercial understanding with Royal Dutch Shell for the latter's participation in Kalol fields in the western onshore region.

A senior ONGC executive said, "We hope to reach some solution by the middle of January. One of the options being considered is floating of a special purpose vehicle to implement the project."

The two entities have been working out modalities on how Shell would participate in the project.

The talks with Shell comes in the backdrop of an MoU inked between ONGC and Shell Exploration Company BV (a subsidiary of Royal Dutch Shell) for wide-ranging co-operation in the hydrocarbons value chain.

The MoU between ONGC and Shell for technology co-operation on field productivity improvements was a general and broad one.

There is a more specific MoU, which is to be signed between ONGC and Shell for specific technology applications on Kalol and other oil fields in western onshore region (Gujarat).

However, the two have not been able to iron out all the commercial terms governing this MoU; final negotiations are still on to arrive at an agreeable draft.

The case is under active consideration, the official told Business Line.

"ONGC has indicated to Shell that the commercial call would be taken on the basis of the percentage of enhanced production the Dutch company is able to get."

Kalol is the highest producing field of ONGC's Ahmedabad Asset in western onshore.

To further enhance its domestic production of oil and gas, the company requires better technology, which expertise is available with Shell.

The average crude production of Kalol field is 1,430 tonnes per day (tpd). The field also produces gas. It comprises several producing blocks.

Indications are that Shell wants to make some investments in the project and not just come in as a service contractor.

ONGC is currently implementing an improved oil recovery (IOR) scheme to augment production in this field, as a part of its IOR/enhanced oil recovery scheme for the company's 15 producing fields.

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