ONGC, Shell Energy Explore Deepwater Oil, Gas and LNG in India
Oil and Natural Gas Corporation and Shell Energy India Private Ltd have entered into a non-binding Memorandum of Understanding to investigate collaborative prospects in deepwater oil and gas exploration and liquefied natural gas procurement, signaling a new phase in global cooperation within India’s upstream energy industry.
The deal, executed on August 10, encompasses possible cooperation in India’s energy sector, which includes joint involvement in deepwater and ultra-deepwater offshore blocks provided under the government’s Open Acreage Licensing Policy, along with upcoming bidding rounds.
ONGC and Shell Energy India will investigate prospects in OALP Rounds X and XI as part of the broader Samudra Manthan initiative, including possible farm-in and farm-out agreements concerning ONGC's current OALP blocks.
The MoU does not bind either company to particular investments or projects but creates a structure for assessing collaboration.
The arrangement enhances ONGC’s recent initiatives to incorporate global expertise into India’s deepwater exploration program.
In August 2022, ONGC entered into a Heads of Agreement with ExxonMobil to work together on deepwater exploration along India’s eastern and western shores, and the firm has subsequently signed comparable memorandums with global leaders like ExxonMobil and Chevron for deep and ultra-deepwater exploration.
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The collaboration will concentrate on two shared areas of interest. On the upstream front, the firms will investigate collaborative involvement in deepwater and ultra-deepwater offshore blocks during OALP Rounds X and XI, as well as farm-in and farm-out possibilities in ONGC’s current land. Regarding LNG, the firms will investigate sourcing possibilities to aid India's shift towards a more robust gas-centered economy.
The upstream sector emerges as India aims to expedite the exploration of its offshore assets and draw investment and technical skills into more difficult deepwater and ultra-deepwater areas.
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The LNG aspect may grow important as India seeks to boost gas usage while addressing increasing energy needs and diversifying its fuel sources, with ONGC stating the partnership aims to foster synergies throughout the energy value chain to enhance exploration, improve energy access, and ensure long-term energy security.
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The agreement is part of a broader effort by Indian energy firms to obtain more domestic oil and gas resources while enhancing access to LNG, as the nation aims to develop a more gas-centered economy and bolster its offshore exploration capabilities through collaborations with international energy giants.