India’s state-run Oil & Natural Gas Corporation (ONGC) has joined hands with ConocoPhillips for exploration and development of 19 deepwater oil and gas blocks. The two companies would also be collaborating in shale-gas exploration.
ConocoPhillips is the third-largest integrated energy company in the US and the fifth-largest refiner in the world. This partnership, however, could result in ONGC offering equity stakes in some of its blocks in India to ConocoPhillips. ONGC chairman and managing director Sudhir Vasudeva, however, said there was no financial transaction between the two companies. “The memorandum of understanding is about getting into technical evaluation of 19 deepwater blocks and also shale gas,” he said.
The first phase involves evaluation of data across Damodar, Cauvery and Krishna-Godavari basins. “We have been looking for a partner for deep-water technology and shale-gas exploration and development, and ConocoPhillips agreed to the same. It is a broad memorandum of understanding,” said a senior ONGC official. Last year, Reliance sold a 30 per cent stake in 21 exploration blocks in India to BP, for a technology tie-up with British Petroleum PLC. This included stake sale in its Krishna-Godavari D6 block off India’s east coast.
ConocoPhillips has extensive experience in the field of shale gas exploration and exploitation in the US where the company holds large acreage position. “There is also a broad umbrella of understanding including what might be an offer in the US or elsewhere, depending on how they select any acreage, if found fit for ONGC to participate,” said SV Rao, director (exploration).
India’s exploration companies have been eyeing the US, seeking equity stakes in shale-gas projects. ONGC said its own endeavour in shale gas was at a nascent stage but cooperation between the two majors was expected to accelerate the learning in shale gas.
Jim Handschy, global chief, geoscience, ConocoPhillips said, “We wanted to focus on India. This is our chance to do that."
According to the Energy Information Administration, which issues official statistics on the sector from the US government, America’s shale gas output was two per cent of all natural gas output in that country in 2000. This rose to 25 per cent in 2011 and should touch 46 per cent by 2035.
India's exploration companies have been eyeing the US, seeking equity stakes in shale-gas projects. ONGC said its own endeavour in shale gas was at a nascent stage but cooperation between the two majors was expected to accelerate the learning in shale gas.
Conoco’s' expertise could help ONGC boost production and raise much-needed cash to fund its investment plans. Indian exploration companies have sought partnerships with overseas oil and gas majors to gain access to technology that will help them increase output and expand their geographical footprints.
Share of ONGC surged 2.45 per cent to close at Rs 267.30 before the announcement.
