Norway’s StatoilHydro is keen on trebling its stake in a discovered gas block operated by Oil and Natural Gas Corporation’s (ONGC) in the Krishna-Godavari basin. The Norwegian company also wants to be joint operator in the block which may produce around a third of India’s current gas supply once it begins production in 2013.
Increasing stake to 30 per cent from the current 10 per cent and getting co-operatorship in the KG-DWN-98/2 block will give StatoilHydro controlling position in the block along with ONGC. It will also bring down ONGC’s stake in the block, in which it discovered gas without foreign support, to the same level as Statoil’s.
“Statoil wants to increase stake to 30 per cent and get joint operatorship in KG-98/2. We are however willing to give only up to 22 per cent stake,” said a senior ONGC official.
StatoilHydro said in an emailed response that the company's only interest in India today is a 10 per cent in block 98/2 in the KG basin on the Indian east coast. "Governmental approval for this share was given in July this year, and there is no new information given after this approval. We look forward to cooperate in this partnership," Statoil said.
The block is estimated to hold around 6.37 trillion cubic feet of gas and produce around 25 million standard cubic feet of the fuel every day. ONGC has also discovered gas in ultra deepwater areas in the block. It however does not have the technological expertise to bring to production gas from those depths and has already given StatoilHydro 10 per cent stake and Brazil’s Petrobras 15 per cent stake in the block, with the option of doubling their stake before the gas production begins. The two overseas companies have the technological expertise and experience of producing gas from deepwater areas.
ONGC however is ready to allow StatoilHydro to raise its stake to around 22 per cent from the current 10 per cent. “That will address their issue of higher stake and our issue of keeping the highest stake,” the ONGC official said.
He added that if Statoil was given 30 per cent stake and Petrobras decided to double its stake to 30 per cent from the current 15 per cent, ONGC would be left with 30 per cent stake, with Cairn India holding the remaining 10 per cent stake.
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“We want to avoid a situation where we are left with the same stake as the others and have also given away our sole operatorship,” said the ONGC official.
The Indian state-owned company has been unwilling to give away operatorship in the oil and gas assets it holds in India. Being the operator of an oil or gas block allows that company the leadership position in the block. It also has the final say in the issues like giving of contracts and marketing of the hydrocarbons produced from the block.