Oil and Natural Gas Corp (ONGC) and Shell Energy India Private Ltd have signed a non-binding memorandum of understanding (MoU) to explore joint opportunities in deepwater and ultra-deepwater oil and gas exploration and LNG sourcing, Business Today reported. The agreement, signed August 10, provides a framework for the two companies to assess potential areas of cooperation across India's energy sector, according to Business Today, and does not commit either company to any specific investment or project.
Deepwater and ultra-deepwater upstream cooperation
Under the proposed collaboration, ONGC and Shell Energy India will explore joint participation in deepwater and ultra-deepwater offshore blocks offered under the government's Open Acreage Licensing Policy (OALP), including ongoing OALP Rounds X and XI and future bidding rounds, according to Business Today. The companies will also examine opportunities under the broader Samudra Manthan initiative, along with possible farm-in and farm-out arrangements involving ONGC's existing OALP blocks.
| Cooperation area | Details under the MoU |
|---|---|
| Deepwater and ultra-deepwater blocks | Joint participation in OALP Rounds X and XI plus future bid rounds |
| Samudra Manthan | Assessment of opportunities under India's broader offshore exploration initiative |
| Farm-in and farm-out | Potential for additional partners in ONGC's existing OALP blocks |
| LNG sourcing | Collaboration to support India's transition to a stronger gas-based economy |
ONGC described the upstream scope of the MoU in a statement reported by Business Today:
Upstream Oil & Gas: Exploring joint participation in deepwater and ultra-deepwater offshore blocks offered under (currently underway) Open Acreage Licensing Policy (OALP) Rounds X and XI, as well as future bid rounds, under the broader impetus of SamudraManthan. The two companies will also explore farm-in/farm-out opportunities in ONGC's existing OALP blocks. The MoU sets out a non-binding framework for such collaboration.
LNG sourcing on the agenda
The second pillar of the MoU is LNG sourcing. ONGC said in a statement reported by Business Today:
Exploring opportunities in LNG sourcing to support India's transition towards a stronger gas-based economy. By bringing together complementary capabilities and global expertise, the collaboration seeks to create new synergies across the energy value chain, supporting deeper exploration, greater energy availability and India’s long-term energy security.
The two companies will explore opportunities to collaborate on LNG sourcing as India seeks to expand the role of natural gas in its energy mix, increase gas consumption and strengthen the availability of gas supplies, according to Business Today. ONGC said the collaboration is intended to create synergies across the energy value chain and support deeper exploration, greater energy availability and India's long-term energy security.
ONGC's record of deepwater tie-ups
The agreement with Shell extends ONGC's pursuit of collaborations with international companies to bring additional expertise into India's deepwater exploration programme, according to Business Today. In August 2022, ONGC signed a Heads of Agreement with ExxonMobil to collaborate on deepwater exploration along India's eastern and western coasts. ONGC has also signed memorandums of understanding with global majors including ExxonMobil and Chevron for deep- and ultra-deepwater exploration.
The proposed partnership with Shell brings together ONGC's position as India's largest oil and gas explorer and Shell's global expertise in upstream exploration and LNG, Business Today reported.
India's offshore push
India is seeking to accelerate exploration of offshore resources and attract investment and technical expertise into deepwater and ultra-deepwater acreage, according to Business Today. The MoU is part of a broader push by Indian energy companies to secure additional domestic oil and gas resources while expanding access to LNG as the country seeks to build a more gas-based economy, the report said.
ONGC announced the agreement with the tagline "Exploring deeper. Collaborating stronger. Powering India's energy future," Business Today reported.
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