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ONGC short-lists three oil service majors to lift output from two fields

The government last September proposed selling a 60 percent stake in ONGC's producing fields to foreign companies to ramp up domestic oil and gas output

Reuters  |  MUMBAI 

Funding may be a mix of borrowing and stake sale

The and (ONGC) is set to hire international service giants for the first time to boost output from domestic fields in response to a government push to increase local supplies and cut expensive imports.

ONGC, India's biggest explorer, has short-listed U.S. service companies Halliburton, and GE subsidiary to submit proposals on boosting production from two onshore fields, according to a document seen by

The three companies have until May to submit their proposals for what is calling a "production enhancement contract" for an oilfield in and another in

"The shortlist is ready. We will now share our data on the two fields with these companies," an said.

The - who did not wish to be named as has yet to make an official announcement - said the final contract is likely to be awarded by May.

Emails to Halliburton, and requesting comment on their participation were unanswered outside of U.S. business hours.


The government last September proposed selling a 60 percent stake in ONGC's producing fields to foreign companies to ramp up domestic and gas output and meet Narendra Modi's target of cutting imports 10 percent by 2022.

India's production has stalled below 1 million barrels per day (bpd) in recent years, even as demand has surged. That has resulted in its crude imports soaring, making it the world's third-biggest importer, behind and the In January, India's imports hit a record of almost 5 million bpd.

ONGC, which the government hopes to eventually build into a global giant like or a state-owned major like PetroChina, has often been criticized by analysts and for failing to increase its production.

ONGC's output - most of it from fields that have been operating for more than 30 years - is declining at the rate of 7 to 8 percent a year. A major part of the company's capital expenditure is spent in efforts to pump more and gas to set off the yearly decline.

For the fiscal year ended March 31, 2017, ONGC's standalone crude production stood at 20.855 million metric tonnes (417,000 bpd), a one percent fall from the previous year.

Once the is chosen in May, the winning service company will be responsible for maintaining production at current levels, and also for boosting output incrementally from the two mature fields, the said.

"We will reimburse the operational expenses incurred and share some pre-determined amount on each barrel of incremental crude that the will produce," the said.

Halliburton, and will get access to ONGC's data rooms pertaining to its Kalol field in and the Geleki field in before submitting a final bid, according to the bidding document.

might replicate the model for other fields if this pilot exercise is a success, the said.

explored a similar move in 2016 and had signed agreements with and aimed at enhancing production, but the agreements were later cancelled, according to reports in


First Published: Wed, February 21 2018. 17:59 IST