ONGC, Norsk Hydro in tech transfer MoU

The Oil and Natural Gas Corporation (ONGC) has entered into an agreement with Norway's Norsk Hydro for technology to produce gas in the ultra deep-water block in the Krishna-Godavari basin, even as an ONGC official told Business Standard that the gas reserves in the block were "just above 2.5 tcf as against the earlier estimates of around 15 tcf".

"It appears that the reserves in the block are far below what we had first estimated. The modular dynamic testing (MDT) in the block seems to have thrown up some wrong estimates," the ONGC official said.

The Directorate General of Hydrocarbons (DGH) had earlier disallowed the MDT carried out by ONGC in the K-G basin block. The DGH had then said that conventional testing needed to be carried out in order to correctly determine the reserves.

The technology transfer by Norsk Hydro could later result in the company picking up stake in ONGC's deep-water block.

Another ONGC official said the deal with Norsk Hydro was for taking the Norwegian company's deep-water technology for gas production. "Stake sale talks are on, but that has not been finalised so far," he added.

ONGC had earlier given Brazil's Petrobras 15 per cent stake in the KG-DWN-98/2 block in a swap offer through which the Brazilian company offered India's largest exploration company 25-30 per cent stake in three of its blocks in Brazil.

The stake sale to Petrobras will also allow ONGC to harness the Brazilian company's expertise in deep-water exploration.

"Norsk Hydro and Petrobras both have expertise in deep-water drilling, and we are looking to harness that," the official said.

He added that a Norsk Hydro team recently visited the K-G basin site and it would start work in the block soon.