‘ONGC not selling equity stake in Mumbai High to any foreign co’

New Delhi: Oil and Natural Gas Corporation (ONGC) will not give any equity stake in its flagship Mumbai High oil and gas fields to any foreign company and is only seeking help from global giants like BP Plc to help reverse declining output from the field, a top government official said on Tuesday.

The foreign company will get a share of revenue from incremental production plus a fixed fee for its efforts, while ONGC will continue to be the operator and incur all the capital and operating expenditure in implementation of the technical solution, the official said.

All risks will be borne by ONGC, while the foreign partner will get the fixed fee even in case of a failure.

“Mumbai High is a field that was given to ONGC on nomination basis and the company has no authority or power to sell a stake in any nomination field,” the official said. “What ONGC has done is floated an international tender to seek technical services providers (TSP) to reverse years of decline in oil and gas production from the field.”

India is more than 85 per cent dependent on imports to meet its requirement of crude oil, which is converted into fuels like petrol, diesel and LPG in refineries, and roughly half of the consumption of natural gas, which is used to generate electricity, make fertilizers, converted into CNG to run automobiles and piped to household kitchens for cooking.

Having spent $175 billion on import of oil and gas in the fiscal year ending March 31, 2024, the government is keen on raising domestic production to cut reliance on imports. But ONGC has not been successful in reversing the decline in output that has set in the 50-year-old field.

“Clearly, the production has been declining. So ONGC is now looking for some technical help from outside,” the official in the ministry of petroleum and natural gas said.

ONGC on June 1, floated an international tender seeking global technical services providers (TSP) with annual revenue of at least $75 billion. The TSP would have to do a comprehensive review of the field performance and identify improvements as well as implement suitable technological interventions and practices for improving production and recovery.

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