The Hindu Business Line : Hopes of ONGC pie keep exploration cos high

STOCK prices of smaller oil exploration companies have moved upward over the last one week on expectation that these companies may get contracts to develop offshore marginal fields, put on the block by Oil and Natural Gas Corporation (ONGC).

The companies whose stock prices were on the rise include Shiv-Vani Oil, Selan Exploration, Dolphin Offshore and Jindal Drilling.

Stock prices of these companies have gained between 25 per cent and 60 per cent on expectation that these companies would be assigned tenders to develop the fields that are believed to have reserves of 63 million tonnes of oil and 29 billion cubic metres gas. In today's trading, the stock price of Shiv Vani Oil closed at Rs 99.80, up 10 per cent on the BSE. Selan Exploration gained 7.98 per cent at Rs 39.90, Dolphin Offshore was up 1.58 per cent at Rs 106.15 and Jindal Drilling jumped 10.33 per cent at Rs 150.10.

ONGC had invited tender for developing 19 offshore marginal fields in December 2004, the closing date for which is February 28. According to a senior ONGC official, it plans to extend the tender date.

More than 40 companies from India and international majors from Malaysia, Canada and UK are said to have made initial bids expressing interest in developing these fields.

ONGC is trying to increase oil and gas recovery from its marginal fields off Mumbai High and the fields would be given to the bidders only for exploration purposes.

ONGC plans to develop 53 marginal fields offshore, believed to have initial in-place reserves of 283.4 million tonnes of oil and oil equivalent gas. Of these, D-1, Vasai East and G-1/GS-15 are already being developed by ONGC. The company may develop another 11 fields on its own, it is learnt.

Of the rest, ONGC had finalised contracts for eight fields last year and service contracts for six fields have been signed. Three fields in Gujarat at Hirapur, Khambel and West Bechraji were awarded to Prize Petroleum while three fields in Assam - Bihubar, Lakhijan and Barsila - were awarded to Assam Company.

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