The Hindu Business Line : ONGC receives nod to include Petrobras, Statoil in KG project

The inclusion of partners would help ONGC to share risks and access technical support in developing its first major discovery in recent years, and may also open the opportunity for securing ultra-deepwater rigs from its partners.

Pratim Ranjan Bose

Kolkata, Aug 12 The Centre has allowed Oil and Natural Gas Corporation Ltd, the E&P major, to include Petrobras of Brazil and Statoil Hydro of Norway as strategic partners in the gas rich KG-DWN-98/2 block, after keeping the company in tenterhooks for nearly nine months.

According to the proposal, Petrobras and Statoil will pick up 15 per cent and 10 per cent participatory interests respectively in the exploratory asset.

ONGC currently holds 90 per cent operating stake in the deepwater block. The company has established presence of approximately 2 trillion cubic feet of gas in an ultra deepwater discovery. Post farm-out, ONGC would control 65 per cent operating interest in the block

“We have received the requisite approval to include strategic partners a week back,” an ONGC source told Business Line.

According to sources, the inclusion of partners would not only help ONGC to share risks and access the much-needed technical support in developing its first major discovery in recent years, but may also open the opportunity for securing ultra-deepwater rigs from its partners.

Digging deeper

The company has one deepwater offshore rig, Discover Seven Seas, at its disposal. While the same may be used in drilling two appraisal wells in the KG block this fiscal, ONGC is searching for rigs to drill at greater depths, which are in acute short-supply worldwide.

“Our rig position will not allow us to drill more exploratory wells in the block at this juncture. To overcome the problem we have sought the help of strategic partners for sharing rigs from their worldwide operations and pave way for expansion of the KG reserve and faster monetisation of the same,” the source said.

“Though we have not received any commitment in this regard either from Petrobras or Statoil, they are reportedly looking into the possibility of such rig sharing,” the source said.

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