ONGC, BG India ink deal for exploration

Oil & Natural Gas Corporation (ONGC) and BG Exploration and Production India (BGEPIL) have signed an agreement to jointly operate with 50:50 interest in three offshore deepwater exploration blocks on the east coast of India.

According to a release issued by ONGC to the BSE today, the blocks, KG-OS-DW III (GD), KG-OS-DW (KD) and KG-OS-DW (KD Extn), are located in the Krishna Godavari Basin covering a total area of 3,090 square kilometres.

"These deepwater exploration blocks were assigned to the company by the central government on a nomination basis and on the New Exploration Licencing Policy (NELP) terms for exploration and development in partnership with a global major oil and gas company," the release added.

BGEPIL has agreed to pay $5 million up-front payment for each block upon receipt of government approval for the farm-in, and additional consideration will be paid towards the exploration costs as well as a payment upon discovery, the release added.

ONGC and BG India have also agreed to explore other mutually beneficial opportunities in India and overseas, the release added.

Subir Raha, chairman and managing director of ONGC, said: "ONGC is happy to welcome BG, after Cairn and Eni, as joint operator in the exploration blocks."