New Delhi: Norway’s Statoil ASA may enter India’s upstream hydrocarbon space in partnership with state-run Oil and Natural Gas Corp. (ONGC) for deep-water exploration, said a top Indian government official aware of the development.
Statoil’s move is guided by a favourable policy landscape, especially in exploration and production (E&P) of deep water blocks.
The Norwegian state-run firm, with expertise in such tricky blocks, is also looking at investing in offshore wind projects here, with the Indian government last week calling for expression of interest (EoI) for the first such project, off the Gujarat coast.
“We have had very good discussions with the Norwegian government representatives and Statoil as well. We can do a long-term technology partnership with them. There can be many things. In the coming days, E&P in India will happen in deep waters. So, if we get Norway and Statoil as a partner, there can’t be nothing better than that," said the senior official, requesting anonymity.
To be sure, Statoil had an Indian presence earlier through Norway’s Norsk Hydro, whose oil and gas operations merged with Statoil in 2007. Norsk Hydro and Brazil’s Petroleo Brasileiro SA (Petrobras) had a 10% and 15% stake, respectively in ONGC’s KG-DWN-98/2 block in the Krishna-Godavari basin off the coast of Andhra Pradesh.
Statoil and Petrobras quit their partnership in 2010 over government delays in approving their participation in the development of India’s key gas find. The government of Norway holds around 67% stake in the world’s largest offshore operator.
Ingvil Smines Tybring-Gjedde, Norway’s deputy minister of petroleum and energy, declined to comment on the proposed partnership between Statoil and ONGC.
Tor Martin Anfinnsen, senior vice-president (marketing and supply) at Statoil, declined to comment on the proposed partnership. He said: “But suffice to say that in the upstream space, we constantly screen both what we say to be perspective areas and assess the regulatory frameworks in those areas. What we are positive to is the development that we have seen of late in the licensing conditions in India. That we find interesting."
India has introduced a new liberal licensing regime under an open acreage licensing policy that ensures greater industry involvement in auction design and is a departure from the earlier regime, in which pre-determined blocks were auctioned.
“As we speak, there is no agreement or deal between Statoil and ONGC. But it’s natural for Statoil to particularly access deep-water where we have acknowledged expertise worldwide," Tor Martin Anfinnsen added.
ONGC, on its part, has been scouting abroad for opportunities to plug technology gaps and leverage the strengths of large oil companies. The search for partners is important for ONGC given the concerns about its production capabilities. While most of the company’s domestic fields are old, its plans to produce gas from the Krishna Godavari field is yet to fructify.
While queries emailed to an ONGC spokesperson remained unanswered, a senior ONGC executive requesting anonymity said, “Earlier Statoil was our partner. They have deep-water experience. Going forward, deep-water discoveries at around 2,900m will have to be brought to production. Experience of a firm such as Statoil will help de-risk our portfolio."