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Pratim Ranjan Bose

Kolkata, July 12 ONGC may offer joint operatorship to British Gas in KG-DWN-98/4 deepwater block, provided the latter brings in a suitable deepwater rig to complete the exploratory drilling campaign in the block in 2009.

BG entered into a firm-in agreement with ONGC for picking up 30 per cent participatory interest in this NELP-I block in February this year.

The international major has reportedly already located a rig, which may be diverted to Indian shores early next year. Interestingly, once the drilling in KG block is over, ONGC may share the same for drilling 4-5 wells in other blocks held by the company.

While comments were not available from BG in this regard, ONGC sources confirmed that they had reached an informal understanding with the foreign major to jointly operate the block in exchange of the proposed rig support.

A formal move in this regard is expected only if the Union Government offers a two-year rig holiday — as was earlier proposed by the E&P companies engaged in oil hunt in the country — to the deepwater offshore exploration blocks offered under the first three rounds of NELP.

According to sources, the proposal was under consideration of the group of secretaries and may be recommended to the Cabinet committee, once the political crisis is over.

Having secured the promising deepwater acreage (KG-DWN-98/4) in NELP-I, ONGC is far from completing the drilling campaign in the block, reportedly due to a rig crisis. To make matters worse, the time deadline for completion of the work programme in the block — as is defined under the production-sharing contract signed in April 2000 — is merely months away.

ONGC holds 55 per cent operating stake in the exploratory asset. The residual 15 per cent is held by Oil India Ltd. The Indian energy major is suffering from acute crisis of offshore rigs, especially the deepwater and ultra-deepwater rigs for quite sometime now, leading to delay in completion of exploratory drilling activity in a number of blocks.

Considering that the company’s freshly chartered rigs will not be available before 2010, the drilling activity in deepwater and ultra-deepwater locations will be affected for the next two years unless rigs are available from some other sources.

“As things stand now, even a two year rig holiday might not be enough for completion of the work programme in the KG block and a few other blocks as well, if we have to deploy the ONGC chartered rigs,” an ONGC official said.

The Indian major is facing the threat of relinquishing 5-6 offshore blocks in the next one year without being able to complete the drilling campaign.

All the blocks were acquired between NELP- I and III.

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