The Hindu Business Line : ONGC plans operations pact with foreign partners

Kolkata, Sept. 25 ONGC may enter into a joint operations agreement with its foreign strategic partners at three deepwater blocks — Krishna-Godavari, Mahanadi and Cauvery basins — within a month. The company is now the operator at all three exploration assets.

While Petrobras of Brazil has strategic interest in all three blocks, Statoil Hydro of Norway is a strategic partner for one block.

According to industry sources, the move to offer joint operations aims to gain easy access to deepwater exploration technology as well as offshore rigs, leading to fast monetisation at all the three blocks which were awarded between NELP-I and III and are nearing their deadline for completion of the minimum work programme.

The blocks include the hydrocarbon-rich KG-DWN-98/2, where ONGC made a major gas discovery during end-2006. The company recently received the Union Government’s approval for inclusion of Petrobras and Statoil Hydro as strategic partners in the exploration asset.

The other blocks slated to be considered for joint operations are MN-DWN-98/3 located off the Orissa coastline and CY-DWN-2001/1 in Cauvery offshore. ONGC struck a minor gas reserve in the Mahanadi block in early 2008. Petrobras is the strategic partner in both the blocks.

This apart, the company recently entered into an agreement with Rocksource ASA to include the Norwegian E&P company as the second strategic partner in the Cauvery block, subject to government approval.

Technology backup

All the three foreign partners including Petrobras, Statoil and Rocksource are considered major players in deepwater oil and gas exploration, with adequate technological as well as exploration logistics (like deepwater rigs).

It may be mentioned that ONGC is also considering making a joint operations offer 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 2009. BG entered into a firm-in agreement with ONGC for a 30 per cent participatory interest in this NELP-I block in February this year.

The move is expected to gain pace once the company finalises a joint operations agreement with Petrobras and Statoil for the KG, Mahanadi and Cauvery basin blocks.

“All three parties have already agreed on the broad principles of the agreement and a detailed discussion, including the commercial aspect, is expected to take place in the next couple of weeks,” a source said.