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India's ONGC eyes collaborations for upstream revival, expansion in clean fuels

Highlights

ONGC finalizes collaborations with Chevron, Equinor ASA and ExxonMobil

Stepping up efforts to speed up production from new blocks

Upstream producer reports 2% year-on-year drop in July-Sept crude production

  • Author
  • Sambit Mohanty    Ratnajyoti Dutta
  • Editor
  • Wendy Wells
  • Commodity
  • Energy Transition Natural Gas Oil

India's state-run Oil & Natural Gas Corp. has finalized a series of international partnerships in an effort to draw the expertise of some global oil majors to expand upstream output, while also collaborating with domestic and international companies to have a bigger footprint in the clean fuels space, the company said Nov. 15.

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A series of tie-ups by the state-run upstream producer, which contributes more than two-thirds of the country's oil and gas output, signals the intention of the company to tap into overseas as well as local expertise to revive a sector that has struggled to register visible growth in output in recent years.

ONGC recently signed an agreement with Chevron New Ventures PTE Limited, a subsidiary of California-based energy major Chevron Corporation, to assess exploration potential in India, the company said.

The company has also sealed an agreement with Equinor ASA for collaboration in the areas of E&P, midstream, downstream and clean energy options, including carbon capture, utilization and storage.

In the clean energy space, ONGC has finalized an agreement to enter into a joint venture with Greenko ZeroC to make green hydrogen and achieve its renewable energy targets.

ONGC has also sealed a heads of agreement with ExxonMobil for deepwater exploration on the eastern and western coasts of India. The collaboration will focus on the Krishna Godavari and Cauvery basins in the eastern offshore and the Kutch-Mumbai region in the western offshore.

"Partnerships between a national oil company like ONGC and an international oil company like ExxonMobil will bring tangible benefits in the entire energy value chain and open new vistas to exploration and production paradigm," ONGC quoted petroleum secretary Pankaj Jain as saying recently.

"This collaboration will boost our confidence in going further ahead in deepwater exploration in the east coast of India where the potential is quite significant," it added.

Making progress

While government officials believe these partnerships would be beneficial for the efficient fast-track monetization of future projects as well as taking India a step closer toward energy security, company officials said ONGC was already making some progress in bringing new production blocks into operation.

Prime Minister Narendra Modi recently inaugurated ONGC's U-field onshore facilities for the KG-DWN-98/2 deepwater block in the southern state of Andhra Pradesh. The U-Field is part of ONGC's flagship deepwater KG-DWN-98/2 Cluster-II development project in the Krishna Godavari Basin. U-Field is the deepest gas discovery of the project, with production potential of about 3 million cu m/d, ONGC said.

The first well of U field — U-3-B — is one of the fastest deepwater welld monetized globally in a record time of 11 months, ONGC said, adding that gas would be evacuated through subsea facilities connected to an onshore terminal at Odalarevu in Andhra Pradesh.

"Gas produced from this project will add significant volumes to ONGC's production and will be a giant leap towards making India a gas-based economy and energy security," ONGC said.

Output falls

ONGC posted a 2% year-on-year drop in July-September crude production to 5.36 million mt, company officials said Nov. 15, while natural gas output fell 2% over the same period to 5.35 Bcm. The company's fiscal year runs April-March.

The company's realized a price of $94.96/b for crude produced in the quarter from its own fields was up 33.5% year on year. It realized $6.10/MMBtu for gas produced over July-September, up 240.8% on the year.

For the April-September period, ONGC posted a 0.1% year-on-year decline in crude production to 10.85 million mt, while its natural gas output fell 0.4% over the same period to 10.73 Bcm.

ONGC realized a price of $102.5/b for crude produced from its own fields in the first six months of its fiscal year, up 48.6% year on year, and discovered six oil and gas fields in the period.

The company's crude oil and condensate output fell 3.7% year on year to 21.71 million mt, or 155 million barrels, in FY 2021-22, while its gas output fell 5% over the same period to 21.68 Bcm.