India’s Oil and Natural Gas Corp is seeking joint venture partners to build very large Ethane carriers (VLEC’s) to ship feedstock for its petrochemical plant in Western India.
India’s ONGC is seeking joint venture partners to build very large ethane carriers (VLEC’s) to ship feedstock for its petrochemical plant in Western India.
ONGC Petro additions Ltd (OPaL), a unit of ONGC, operates a duel feed cracker. ONGC Plans to source 800,000 tons per year ethane to secure feedstock for the Plant from May 2028.
ONGC is seeking partnership with companies with experience in the operation and management of VLEC’s, very large Gas Carriers and Liquefied Natural Gas Carriers in the Global Market.
The proposed joint ventures will secure local and foreign funding and select shipyards for construction of VLEC’s. ONGC will be responsible for shipping Ethane and chartering of VLEC’s from the planned joint venture.
The last date for submission of interest is 27th March, 2025.
US giant Marathon Oil pledging investments and technology to raise output from Mumbai High Oil and Gas Fields, companies such as Occidental Petroleum seeking a stake and at least two privatisation bids have seen final culmination in global energy giant BP signing up to lift output from India’s prime field lying off the Mumbai Coast.
ONGC last month signed a technical service contract with BP to reverse declining output from the ageing field. BP has pledged to lift oil production by 44 percent and gas output by 89 percent from India’s largest field in exchange for a fixed fee.
The BP deal is exactly similar to the one ONGC had in 1998-99 signed with Marathon Oil Corporation, according to industry sources.
Like BP, Marathon wasn’t’ getting any stake in the field but only a pre-agreed share in the incremental oil and gas production over a defined baseline. Unlike BP, Marathon was to make its own investments in technological changes needed to boost output.
In the BP deal, ONGC will make all investments and BP, London-based firm, is only to give technical advice. For the first two years, BP will get a fixed fee for its advice and thereafter a share of the incremental Oil & Gas. BP has no skin in the game. Marathon was not to be reimbursed the amount it invested if the production did not increase. ONGC had signed with Marathon but the US Energy giant walked out of it when the baseline was changed in the documents to the Ministry of Petroleum & Gas for approval. ONGC never achieved the baseline production indicated in the revised documents. Other than Marathon, a few other Global Energy giants too were interested in Mumbai High but they wanted a stake which the law did not provide for.
Those that eyed a stake in the production sharing contract (PSC) included Shell and Occidental Petroleum.
With the field seeing a steady decline in output, a stake sale had been considered on two occasions in recent years but it could not go through with stiff opposition from ONGC Management.
A high-level committee headed by the then Niti Aayog VC in late 2018 considered ‘transferring’ western off-shore oil and gas fields of Mumbai High as also some fields in Mumbai Off-Shore, Assam, Rajasthan, and Gujarat to private/foreign companies. The Oil Ministry twice in 2021 told ONGC to give up 60% stake, plus operating control of Mumbai High and Bassein fields to foreign Companies.
ONGC in June 2024 floated a tender seeking advanced recovery technologies and expertise from foreign firms to reverse the declining output at it’s flagship Mumbai High fields, offering a share of revenue from incremental production plus a fixed fee but not any equity stake.
BP and Royal Dutch Shell put in an expression of interest at the close of the tender in September, 2024. The Tender called for bids from companies that had a minimum revenue of US$ 75 billion.
Shell, however, did not put in the final price bid, which was to detail the incremental production and the revenue share sought. BP was the only firm that put in the bid. ONGC selected BP as its technical service provider to assist in boosting output from a baseline crude production of 45.47 million tons and 70.40 bcm of Gas.
BP Projected an increase in Oil production by 44% to 65.41 mio tonnes and Gas output by 89% to 112.63 bcm from Mumbai High Field, ONGC said adding the increase in production is expected to begin in the next fiscal year starting 1st April with full- scale visibility anticipated by 2027-28.
According to ONGC, BP will receive a fixed fee for the first two years, followed by a service fee based on a pre-agreed percentage share of the revenue from net incremental production, after recovering the incremental costs.
The service fee is however subject to a 25% ceiling, in a third-quarter earnings presentation. The Contract period with BP is 10 years, which can be extended by five years.
BP will deploy an expert technical team for a minimum period of two years and BP will review field performance and identify improvements in wells, and reservoirs including water injection and management of the facilities.
Mumbai High Field currently produces around 1,32,265 barrels of oil per day and around 13 billion cbm of gas (less than 10 million standard cubic meters per day. This was projected to decline to about 75,000 bpd of oil and less than 4.5 million standard cbm of gas by 2037-38.
For a country that is more than 85% dependent on imports to meet its needs for crude oil, the BP deal holds good promise.
The Mumbai High Field (Bombay High) – lies some 160 kms in the Arabian Sea off the MumbaI coast, discovered in February 1974 and production started in May 1976.
ONGC produced a total of 18.4 mio tonnes of crude oil in 2023/24 fiscal year, down from 18.54 mio tonnes in the previous year. Gas output declined 3.2 percent to 19.974 cbm.
Marex Media