New Delhi: Oil and Natural Gas Corp. Ltd (ONGC) has shortlisted 10 companies—including the world’s top hydrocarbon exploration service providers Schlumberger Ltd, Petroleum Geo-Services ASA and CGGVeritas—for a seismic survey of 19,000km of exploratory blocks.
The tender for the survey is valued at around Rs 1,200 crore.
The annual tender, which couldn’t be awarded last fiscal year, is important to state-owned ONGC, given the concerns about its production capabilities and the need to find new reserves.
Watch Video
ONGC has shortlisted 10 companies to survey its exploration blocks. Mint’s Utpal Bhaskar tells us more.
“The tender which is getting prepared is for the acquisition of the seismic data and will be among the largest such tenders awarded in India. Schlumberger, Petroleum Geo-Services and CGG have shown interest,” said a person aware of the development, requesting anonymity.
“We have shortlisted 10 companies for survey of various categories of blocks such as deep water and shallow water, which were awarded to us under Nelp (New Exploration Licensing Policy). Some of the companies shortlisted are Schlumberger, Petroleum Geo-Services and CGG,” said a senior ONGC executive, also requesting anonymity.
The explorer made an investment of Rs 22,700 crore in the 10th Plan (2002-07) and increased it to Rs 1.7 trillion in the recently ended 11th Plan (2007-12). It now seeks to spend Rs 2.65 trillion in the 12th Plan (2012-17).
“As the subject issue is at the process stage, we won’t be able to respond to queries at present,” an ONGC spokesperson said in an email response. Questions posted on Schlumberger’s website on Sunday and those emailed to Petroleum Geo-Services and CGG remained unanswered at the time of going to press.
The Indian explorer has also been scouting abroad for opportunities to plug the technology gaps and to leverage the strengths of large oil companies. According to its Perspective Plan 2030, the company aims to unlock more than 450 mtoe from “yet-to-find” reserves.
The company is targeting production of more than 130 mtoe in 2030, of which half will come from ONGC Videsh Ltd (OVL), its overseas arm’s assets.
However, falling production remains a concern with analysts.
BOB Capital Markets Ltd in a 31 May report said, “In spite of frequent additions to its oil and natural gas reserves, production growth has been very slow in the recent past. Industry-leading reserve replacement ratio has not translated into higher production. For example, exploration in the KG (Krishna-Godavari) basin has been going on for 11 years now.”
Motilal Oswal Securities Ltd said in a 12 July report, “ONGC has sustained domestic production in the last decade, despite no major discovery. Its mature fields (both offshore and onshore) are declining at a steep rate of ~7%.”
Improvement in ONGC’s production is important given the limited supplies from India’s domestic energy sources and its dependence on imports, as high as 80% for crude oil and 25% for natural gas. The country is the world’s fourth largest consumer of energy after the US, China and Russia, accounting for 4.4% of it.
OVL is the only company among Indian state-owned firms with producing assets overseas. It has a presence in 15 countries through participation in 33 projects, and has proven balance of oil and gas reserves of 202.908 mt. But its producing properties in Sudan have been affected by South Sudan’s decision to cap wells, and the ones in Sakhalin and Syria are in decline.
A 31 May Brics Securities Ltd report said, “We are lowering oil production estimates from nomination blocks for FY13 and FY14 by 8% and 10% to 24 mt and 24.5 mt, respectively, in order to account for decline from mature fields. We are also lowering OVL oil output estimates for both these years by 20% and 30% to 6 mt, to factor geopolitical problems in Sudan and Syria.”
According to India’s oil ministry, the country’s energy demand is expected to more than double by 2035, from less than 700 mtoe today to around 1,500 mtoe.
utpal.b@livemint.com
R. Sree Ram contributed to this story.
