The Oil & Natural Gas Corporation (ONGC) will go for 50:50 joint ventures with international oil companies to explore and exploit crude oil both off-shore and on-shore to take advantage of the new exploration licensing policy.
Corporation chairman and managing director B C Bora said here yesterday that global majors like Petrobraz, the national oil company of Brazil, and Shell International, have evinced interest in tying up with ONGC to develop deep water oil-fields.
He said the corporation would make aggressive bidding for new oil blocks, for which tenders will be floated soon under the new exploration policy. We are working on this. For some blocks, we will bid on our own but for others we would like to share risks with the private companies, who have experiences in specific areas.
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He said companies like Premier and Unocal have shown interest to work with the corporation, which is hoping to post a profit of Rs 2,034 crore in the current financial year, the same as last year. He discounted a direct threat to ONGC monopoly in the short to medium run from global giants on account of opening up of the oil sector. I dont think they will come on their own, he said.
Claiming that ONGC would become an energy company at par with any other in the world in the next 10 years, Bora, however, admitted that we have still to fill in lots of gaps like time and costs we incur in undertaking any operation... We have to bring in lot of improvement.
He said the corporation was pinning its hopes on deep water exploration. as new exploration blocks would be free from administrative price mechanism (APM).
Other on-shore areas like those in Northeast hold promise, Bora said.
Admitting that corporations operation at Bombay High had reached a saturation point and, that the ONGC urgently needed to develop new fields, Bora said only a few oil companies the world over had done substantial amount of work and developed oil fields in the deep sea.
We would like to get the benefit of their expertise, he said while hinting at a possible tie-up with Petrobraz, which made highest profits in the deep-sea ventures, for the corporations proposed deep-sea projects.
Petroleum minister Janeshwar Mishra had recently said in an interview that there was a need for doing deep sea exploration in view of Bombay Highs crude production reaching a plateau. He said the Indian companies should get international technology for this purpose.
The Bombay High operations, which started in the mid-60s employing the state-of-the-art technology, have seen 16 per cent of the oil reserves already exploited, Bora said, and added that, usually about 30 to 35 per cent of the reserves are exploited in such a venture.
The cash rich corporation, which plans to fund at least over 80 per cent of its ninth plan activities (outlay Rs 24,500 crore) from internal resources only, is also contemplating entering new business arenas to give value addition.
We may even go in for marketing if we come across major discoveries, he said, but added that, the idea was still at a conceptual stage.
ONGC was contemplating captive refineries for generating fuel for power projects as the corporation found it unviable to transport the small quantity of crude from Cauvery basin to Vizag Refineries due to excessive transport cost, he said.
We are looking at the feasibility of captive refineries for our field having crude production of 1200-1300 barrel a day, he said.
Apart from entering the business of liquefied natural gas (LNG) through a joint venture between four oil sector PSUs Indian Oil, Hindustan Petroleum and Bharat Petroleum the corporation is also exploring possibilities of manufacturing value-added products like parazylene.