Mumbai: Shell India, the operator of the Panna-Mukta-Tapti fields, a joint venture, has shelved its plan to sell its 30% stake in the Panna and Mukta oil fields, two people aware of the development said.
Panna and Mukta are oil fields while Tapti is a gas field located near state-run Oil and Natural Gas Corp.'s (ONGC) Mumbai High complex. Shell and Reliance Industries Ltd hold 30% stake each in the Panna-Mukta-Tapti (PMT) joint venture, while ONGC holds the remaining 40%.
"Shell has called off the stake sale. Shell wished to move out of non-core assets in its portfolio but with depleting hydrocarbon reserves of the PMT field, it is difficult to find a buyer," said one of the two people cited above and a banker on condition of anonymity. Shell, ONGC and RIL did not respond to an email sent on 30 January.
Production sharing contract (PSC) for the PMT fields is scheduled to expire in December 2019 and the three partners have not applied for an extension of the same.
"PMT fields have run their course and production has been declining form the fields. Since 2009-10, production is down around 60%. We have thus not applied for extension of the PSC," said a senior official from one of the PMT joint venture companies, requesting anonymity.
During the third quarter of this fiscal, the Panna-Mukta fields produced 1.32 million barrels of crude oil and 15.2 billion cubic feet of natural gas, a drop of 10% in crude oil and 3% in natural gas on an on-year basis. "Lower production is mainly on account of natural field decline and unplanned shut-in of wells due to asset integrity issues. Currently, 68 wells are under production in Panna Mukta. Plugging and Abandonment of wells is in progress at Tapti platforms which is expected to be completed by next quarter," said RIL in its third quarter results announced on 19 January.
The Tapti field is being abandoned due to a significant drop in reserves. It will be the first offshore field to be abandoned in India. "Facilities consisting of three platforms of the Tapti field have been handed over to ONGC. The plugging and abandonment of wells and decommissioning of associated facilities are already under progress," said the second person cited above.