The Hindu Business Line : Norsk Hydro takes 10% stake in ONGC’s KG block

New Delhi, Aug 30 Norsk Hydro, the Norwegian oil major, has taken 10 per cent farm-in stake in the State-owned ONGC’s deepwater block in Krishna-Godavari Basin. The Norwegian company has inked a farm-in agreement with ONGC to take a 10 per cent participating interest in the latter’s KG-DWN-98/2 block.

As per the agreement, signed on Wednesday, Norsk Hydro has agreed to acquire a 10 per cent participating interest in block, with an option to increase it by another 10 per cent after commerciality. According to sources, this agreement is a follow-up of the development and cooperation agreement signed in July this year between the two companies.

According to the July agreement Norsk Hydro had agreed to acquire a participating interest of 10 per cent KG-DWN-98/2, with an investment cap of $26 million during appraisal phase and with an option to increase it by another 10 per cent. Bringing in a farm-in partner is a common practice in the oil exploration industry, sources said. Norsk Hydro is also working with ONGC for thin-oil-ream exploitation in Vasai East, which was one of the areas identified in the earlier agreement.

Offshore exploration blocks

The Norwegian firm may go for participating interest in more NELP blocks. ONGC has 32 offshore exploration blocks under NELP, of which 26 are in deep-waters and six in shallow-waters. Of the 26 deep-water blocks, 12 are in ultra-deep-waters. ONGC has 100 per cent participating interest in 12 blocks and the balance is with others having various participating interests.

The support and cooperation with strategic partnership with Norsk Hydro will not only help ONGC to build up the technology, knowledge and confidence to produce from deep-sea acreages, but will also help ONGC acquire sophisticated technology for completion of deepwater wells.