BG India to bag three ONGC oil blocks

BG India is all set to bag ONGC's three blocks in the Krishna-Godavari basin for farm-in contracts as the sole bidder. The company's bids are under evaluation and are likely to be accepted.

Oil and Natural Gas Corporation had offered five deepwater blocks for farm-in contracts under which it would have retained the ownership of the blocks, while the contractor would conduct exploration.

Officials told Business Standard the blocks likely to be awarded to BG were KG-OS-DW, KG-OS-DW Extension and KG-OS-DW 3. The remaining two blocks did not attract any bidder.

ONGC had shortlisted six companies for the blocks - BP, BG, Petrobras of Brazil, Petronas of Malaysia, United States-based Anadarco and BHP Billiton of Australia "" and asked them to submit bids by September 6. "But, only BG submitted bids for the three KG basin blocks out of the five offered by ONGC," said an official.

Besides the three KG blocks, ONGC had offered one block in Kerala Konkan offshore and one in Gujarat Kutch. The offer was made at the terms laid down by the New Exploration and Licencing Policy (NELP), though in farm-in contracts, ONGC would retain the right over blocks.

"In the event of ONGC deciding to award the contracts to BG and the British company striking oil or gas, it will get 50 per cent share in the production," said an ONGC executive.

These blocks were given on nomination basis to ONGC, prior to the launch of government's privatisation programme in the upstream sector.

ONGC has access to the seismic data and has done exploratory studies of these wells. "We were looking for companies with experience in deepwater exploration to get better technology to the country," said an executive.

ONGC had put the blocks on offer along with the fifth round of NELP, in which the government offered 20 exploratory blocks.