Ongc-Ioc May Float Deep-Sea Venture

This could be the countrys first project to explore oil below 200 metres under water. ONGC is also scouting for a foreign technical partner.

The two state-owned oil giants are in the throes of firming up a proposal to be placed before the government for approval.

Deep-sea exploration involves drilling beyond 200 metres in the sedimentary basin. Most activities of this kind have hitherto been confined to depths between 100 metres and 200 metres.

ONGC, which has, of late, come under pressure from the government on the issue of declining domestic crude production, is devoting special attention to this project. The domestic oil output this year is expected to fall by a staggering four million tonnes, thus increasing the oil import bill by Rs 2,800 crore.

 

Alarmed over the trend, the ministry of petroleum and natural gas has asked ONGC to expedite its deep-sea exploration project.

Sources say the ministry is keen on ONGC importing technology for the project through a foreign joint venture or by hiring a technical consultant. ONGCs choice of IOC as a partner is interesting because the government has frowned upon the idea of public sector refining companies jointly entering exploration.

Recently, a proposal for a venture between IOC, Bharat Petroleum and Hindustan Petroleum to conduct exploration activities was shot down by the ministry.

In case the this project earns the government nod, ONGC intends to formalise its ties with IOC.

The proposed equity structure of the new company is not yet known.

Considering the high risk and new technology needed for this maiden exploratory work, ONGC is scouting for an overseas technical consultant. Neither ONGC, nor IOC have an expertise in deep sea exploration.

ONGC has hands-on experience in drilling and crude production at a water depth of 200 metres.

The proposed venture will take ONGC into a frontier area where exploration activities will be done in the sedimentary basin at a water depth between 200 and 1,000 metres.

ONGC has earmarked Rs 6,500 crore for deep-sea exploration in the next five years. The corporation can also bank on the IOC which has reserves worth Rs 7,875 crore.