ONGC in advanced talks with foreign partners for joint-bidding in next hydrocarbon field auction

State-owned explorer Oil and Natural Gas Company (ONGC) is in talks with several foreign partners for an agreement to bid jointly in the tenth round of the Open Acreage Licensing Policy (OALP) and discussions are “in advanced stage for final agreement”, Arunangshu Sarkar, Director (Strategy & Corporate Affairs) told The Hindu.

“We would prefer a partner because exploration in deepwater and ultradeep waters is capital-intensive and comparatively more difficult,” he stated, adding, “[Drilling] one deepwater well entail costs of approximately ₹1,000 crore. With a partner, it helps to distribute the associated risk, especially amidst the lower oil price regime along with the advancement of deep-water technology.”

Mr. Sarkar observed that, of late, globally international oil companies, have been shrinking away from exploration. “This is a global trend. International oil companies have been shying away from exploration because this is a high-cost business and are going more towards trading and downstream. It is a bit difficult to get a partner, but we are trying to get a partner,” he stated. Mr. Sarkar also observed that national oil companies continue doing exploration.

In the erstwhile OALP round, ONGC has bid with varied foreign explorers, including BP.

JV with Shipping Companies

Earlier this year, the explorer-producer incorporated two joint venture companies, those are, Bharat Ethane One Ltd and Bharat Ethane Two Ltd— in partnership with the Japanese shipping major Mitsui O.S.K. Lines (MOL) to import ethane from U.S. using two Very Large Ethane Carriers (VLECs). The vessels are to ensure long-term, secure transportation of imported ethane to ONGC Petro additions Limited (OPaL). The VLECs will be constructed by JVs at Samsung Heavy Industries (SHI), strengthening supply chain reliability and enhancing ONGC’s strategic control over feedstock logistics, the company had stated.

“At ONGC, we need offshore supply boats for supplying raw materials and resources from our base to offshore platforms,” he stated, adding, “At present, we have chartered boats which we hire and take their services. Also, ONGC floated a tender to procure four PSV (Platform Supply Vessel). so ONGC will have both own and hiring vessel.”