Will ONGC be Successful in Farming Out of Espirito Santo?

Oil and Natural Gas Corp (ONGC) is probably seeking to farm-out 30% to 40% interest in Block BM-ES-42, Espirito Santo basin, Brazil. The block, covering an area of 725 sq km, is located in the water depths of about 1,500 metres. ONGC holds 100% interest in the block. Continue reading here..

Cove Energy attracts interest from Thai and Indian NOCs

PTT Exploration and Production Pcl (PTTEP) is reported to be considering to bid for Cove Energy Plc, a British oil and gas explorer, which has put itself up for sale. Continue reading..

BG and ENI eyeing for stake in ONGC’s KG – DWN - 98/2; Plans to spend around INR 36,000 crore (US$ 7,898 million) along with its partners on developing the block

In 2010, India’s state run Oil & Natural Gas Corporation (ONGC) has made significant finds in the Krishna Godavari (KG) basin, which is right next to the KG-D6 block of RIL in the K-G basin, off the east coast. ONGC is aiming to develop the KG basin assets through four different projects. The G-1 and GS-15 integrated development followed by the S-1 and Vasistha deep-water development, exploitation of discoveries in the KG-DWN-98/2 block and Project Manik, involving the oil finds.

The blocks are divided into two discovery areas - the Northern Discovery Area (NDA) consisting of the Padmawati, Kanakadurga, Annapurna, N-1, D/KT, U, A, W and E gas finds in water depths ranging from 594m to 1,283m and the Southern Discovery Area (SDA) consisting of the UD-1 discovery falls in ultra-deepwater with a depth of 2,841m.

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 to foreign firms. In 2010, ONGC had asked foreign firms to submit proposals to buy a stake in the block. Cairn India is already a 10 per cent partner in the block.

“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,” said, one of the board members, ONGC. He added the discoveries in KG-DWN-98/2 and three in adjacent blocks together hold 6.37 trillion cubic feet (tcf) of in-place reserves. RIL’s KG block holds in place reserves of 11.3 tcf.

In February 2011, BP agreed to buy a 30-percent stake in 23 oil and gas blocks owned by Reliance Industries for $7.2 billion, as part of a long-term deal that involves a total investment of $20 billion. Nearly four months after RIL signed a deal with BP for getting BP’s technology for deep-sea exploration.

To know more about Reliance-BP's $7.2 billion deal, CLICK HERE 

Block 1G was given to ONGC on nomination basis. It cannot sell stake to any firm and can at best involve a foreign firm as a service contractor. ONGC has partnership with BG India in three blocks in KG offshore, two operated by ONGC and one operated by BG. Petrobras and ENI have also partnership in one block each.

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ONGC has entered into a period of exploration for appraisal after completing the exploration MWP commitments in block KG-DWN-98/2. The company plans to start producing 25-30 mscmpd of gas from the block in 2016-17.

Source Documents:

ONGC to sell 30 percent stake in KG block

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BP Rosneft share Swap in problem – Rosneft may look for new Asian partners to develop the Arctic project

Share swap between BP and state-controlled Rosneft under which they agreed to jointly explore for offshore oil and gas in the areas of the Arctic is in problem after TNK BP won an injunction in a London court that froze the deal and is now seeking to be part of it. 

Rosneft and the Russian government have made clear such move was not welcome. On 2 March the TNK-BP management had proposed buying a $7.6 billion stake in BP and joining the offshore partnership with Rosneft. The deal with Rosneft gives BP more clout in Russia and effectively sidelines TNK BP.

Two months after Rosneft-BP strategic alliance announcement, Rosneft  is considering new partners

After 2 months of BP Rosneft deal, Rosneft is considering partnering with Chinese and Indian energy companies to work on Arctic projects.

Arctic Project Overview

For more: www.deerickpetroleum.com

ONGC misses the bus again “Will it be Chinese who will outbid ONGC”

ONGC has lost bid to buy US energy major Exxon Mobil's 25% stake in a deep-sea oil block in Angola. ONGC had last year bid around $2.1-2.2 billion for the 25% stake in Block 31 in Angola. It will be fair to guess that it might be a Chinese, Korean or even a Thai company which has bidded more than ONGC.

It is not that ONGC is out of the race. They have an option to hike their bid. But more importantly, if the company at the forefront is not liked by Angolan government, Exxon may be forced to go to other bidder.

ONGC failed to acquire Akpo in the past
ONGC had in 2004-05 lost out on acquiring 45% stake in the giant Akpo oilfield in Angola.
The government had rejected ONGC proposal due to Akpo's ownership issues. After Indian government disallowed ONGC to pursue the Akpo opportunity, China's CNOOC Ltd acquired the 45% stake for $2.268 billion.

Block 31 overview

Block 31 is expected to produce 1,50,000 barrels of crude oil per day (7.5 million tons a year) and output is expected to start in 2012. In all 19 oil discoveries have so far been made in the block. Sonangol is the concessionaire of Block 31. The other interest owners in Block 31 are BP (26.67% and operator), Sonangol P&P (20%), Statoil (13.33%), Marathon (10%) and Total (5%).