State-owned ONGC is in talks with energy majors BP Plc, Exxon Mobil, BG Group, Eni and BHP Biliton for a strategic tie-up for its Krishna Godavari basin gas block. “We are looking at exploration firms with expertise to produce from deep-sea. We have opened our KG basin block data to global companies and have sought firm offer,” said Dinesh Pande ONGC director (exploration).  ONGC is looking for a partner after Norway’s Statoil and Petrobras of Brazil decided to quit the block KG-DWN-98/2 due to government delays in approving their participation in the deep-sea acreage. The block now has 10 gas discoveries and ONGC plans to tie-up these with six gas finds in neighbouring 1G block to begin production in next 3-4 years.  Pande said KG-DWN-98/2 was awarded under the New Exploration Licensing Policy and the policy allows it to farm out a participating interest (equity stake) to foreign firms.

 But since Block 1G was given to it on nomination basis, it cannot sell stake to any firm. ONGC can at best involve a foreign firm as a service contractor. “The companies have to decide if they are comfortable with taking stake in one block and being a service contractor in the other,” he said. BP, Exxon, BG and Eni have already seen the data of the prospects ONGC has discovered in the KG-DWN-98/2, that sits next to Reliance Industries’ prolific KG-DWN-98/3 or KG-D6 block, and 1G block in Bay of Bengal. BHP has also shown interest but it has not seen the data as yet.

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