State-run Oil & Natural Gas Corporaton (ONGC) will today, sign an agreement with ConocoPhillips on the exploration and development of shale-gas reserves and deep-water oil and gas blocks, the company said.
ConocoPhillips is the third-largest integrated energy company in the US and the fifth-largest refiner in the world.
However, the partnership could result in ONGC offering equity stakes in some of its blocks in India to ConocoPhillips.
Last year, Reliance Industries, for a technology tie up with British Petroleum PLC, sold a 30% stake in 21 exploration blocks in India to BP. This included stake sale in its prolific Krishna Godavari D6 block off India's east coast.
"It is a broad Memorandum of Understanding we will be signing today. There is no financial commitment made as of now. We have been looking for a partner for deep-water technology and shale-gas exploration and development and ConocoPhillips agreed for the same," said a senior official from ONGC.
ONGC said ConocoPhillips has extensive experience in the field of shale-gas exploration and exploitation in the US where the company holds large acreage position.
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India's exploration companies have been eyeing the US seeking equity stakes in shale-gas projects. ONGC said while its endeavour in shale gas is at a nascent stage, the co-operation between the two majors is expected to accelerate the learnings in shale gas.
As per the Energy Information Administration, which releases official energy statistics from the US government, US produced 2% shale gas in 2000 and its contribution to US natural gas output increased to 25% in 2011. The US-based estimates this ratio to touch 46% by year 2035.
This partnership will also be significant as ONGC, post Bombay-high, has not been able to bring any new major fields into production in the last three decades.
ConocoPhillips' expertise could help ONGC boost production and raise much-needed cash to fund its investment plans.
Indian exploration companies have sought partnerships with overseas oil and gas majors to gain access to technology that will help them increase output and expand their geographical footprints.
Share of ONGC surged 2.45% to close at Rs 267.30 before the announcement.