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ONGC to sell 30pct stake in KG block
Friday, 17 Jun, 2011
Nearly four months after Reliance Industries Limited signed a deal with British Petroleum for getting BP’s technology for
deep sea exploration, state-run Oil and Natural Gas Corporation is in talks with BG Exploration and Production, India and
Italian exploration and production major, ENI, to sell up to 30% stake in its Krishna-Godavari DWN 98/2 block. Cairn India
is already a 10% partner in the block.
The block is right next to the KG-D6 block of RIL in the K-G basin, off the east coast.
RIL in February sold 30% stake in 23 of its oil and gas blocks to BP for USD 7.2 billion, as part of a long-term deal that
involves a total investment of USD 20 billion.
When contacted, two board members of ONGC confirmed that the company has been in discussions with BG and ENI for
technological assistance and is willing to offer up to 30% in the block. One of the board members said that “Giving away
more will result in losing control and, in turn, our decision-making ability. We want an international partner who can get us
the technology for deep-sea exploration. Both BG and ENI have it. These players are experts in deep water and know exactly
how to go about the routine of the block.”
He added the discoveries in KG-DWN-98/2 and three in adjacent blocks together hold 6.37 trillion cubic feet of in place
reserves. RIL’s KG block holds in place reserves of 11.3 tcf.
ONGC, along with its partners, plans to spend around INR 36,000 crore on developing the block.
When contacted, the BG India spokesperson said that “We did visit the data room. We will take a call on this as and when we
hear from ONGC.”
KG-DWN-98/2, which has 10 gas discoveries, was awarded under the New Exploration Licensing Policy, which allows
ONGC to farm out a participating interest (equity stake) to foreign firms. ONGC plans to tie up its KG basin discoveries with
six gas finds in neighboring 1G block and is seeking approval from the oil ministry. The ministry, however, is taking time to
grant approval.
(Sourced from BS)
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