Partnership with BP Plc to boost ONGC’s revenue by $10.30 billion
New Delhi: BP Exploration (Alpha) Ltd., a wholly-owned subsidiary of BP Plc, UK, has been chosen as the Technical Services Provider (TSP) for ONGC’s Mumbai High (MH) field, an official communiqué mentioned on Thursday.
This collaboration is set to unlock substantial increases in crude oil and gas production over the next decade, leveraging cutting-edge technologies and global expertise to secure India’s energy future.
According to ONGC, the engagement with BP is projected to deliver a 44 per cent increase in crude oil production, rising from a baseline of 45.47 MMT to 65.41 MMT, and an 89 per cent surge in gas production, from 24.94 BCM to 47.22 BCM. In terms of oil and oil-equivalent gas (O+OEG), this represents a 60 per cent increase, from 70.40 MMToe to 112.63 MMToe.
The production boost is expected to commence visibly from FY26, with full-scale realization anticipated by FY28.
This incremental production could generate additional oil and gas revenues of up to $10.30 billion (net of levies) over the contract period. Additionally, the initiative is expected to contribute up to $5 billion to the Government of India’s exchequer through royalties, cess, and other levies.
Under the terms of the agreement, BP will receive a fixed fee for the first two years of the contract. Subsequently, it will earn a service fee based on a percentage share of the revenue derived from net incremental hydrocarbon production, post-recovery of incremental costs. This performance-linked model aims to align the incentives of the TSP with the project’s success, ensuring sustained production growth and financial returns.
Discovered in 1974 and operational since 1976, the Mumbai High Field is a prolific, multi-layered offshore reservoir located in the Mumbai basin. It has played a pivotal role in India’s energy landscape for nearly five decades.
Over the years, ONGC has implemented several enhancement measures in the MH field to sustain production, including gas and water shut-off operations, side-tracking underperforming wells, optimizing water injection support, deploying gas-lift technology, and conducting infill drilling campaigns. Despite these efforts, the field continues to face production challenges due to its maturity, necessitating more advanced interventions.
Recognising the need for global expertise, ONGC issued an International Competitive Bidding (ICB) tender to engage a TSP with proven capabilities in managing complex mature reservoirs.
The tender invited major international oil companies with robust technical expertise, financial strength, and a successful track record in similar projects. Global energy giants, including Shell and BP, expressed their interest and participated in the pre-bid process, with BP eventually submitting the winning bid.
BP’s scope of work includes a comprehensive review of the field’s performance, identifying improvements in reservoir management, facilities, and well operations to enhance production.
The company’s experience in deploying advanced recovery technologies and operational best practices is expected to address the challenges faced by the Mumbai High field effectively.
The Mumbai High Field remains a cornerstone of India’s domestic crude oil and natural gas production, contributing significantly to the nation’s energy security. ONGC, which accounts for approximately 75 per cent of India’s domestic hydrocarbon output, views this partnership as a strategic step toward maximizing the potential of its flagship asset.
By engaging BP as the TSP, ONGC aims to leverage global best practices to enhance the MH field’s productivity, ensuring its continued contribution to India’s energy self-reliance.
