UK-based BG Group in talks to buy stake in ONGC's assets
"We spoke to ONGC number of months ago... rather almost an year ago for picking up (a) stake in their oil assets... the proposal is with them," BG India President and Managing Director Walter Simpson told reporters on the sidelines of the World Energy Policy Summit here.
The Krishna Godavari basin deepsea block KG-DWN-98/2 sits next to Reliance Industries' prolific KG-D6 fields in Bay of Bengal.
ONGC has discovered 3.42 trillion cubic feet of inplace gas reserves in the block, of which 1.904 Tcf is recoverable.
Officials in the state firm said ONGC was in discussions with 3-4 foreign firms, including London stock Exchange-listed energy major BG Group with expertise to exploit deep-sea discoveries.
"We have plans to start production from this block in 2016-17," said an ONGC official.
Cairn India has 10 percent stake in the block while ONGC owns the remaining 90 percent.
ONGC has submitted Declaration of Commerciality for the Northern and Southern Discovery Area in the block. The northern part of the block has seven finds which it plans to tie-up with two other gas discoveries in an adjacent block.
Once sector regulator DGH approves the commercial viability of the finds, ONGC will make a formal field development plan (FDP) outlining the specifics of producing gas from the find.
ONGC has tentatively pegged the investment required for bringing to production the Padmawati, Kanakadurga, Annapurna, N-1, D/KT, U, A, W and E gas finds in the Northern Discovery Area (NDA) of the block at over USD 7.7 billion.
In the southern part is the ultra deep sea UD-1 find that will be developed separately.
Simpson said BG India plans to drill more well on the Panna/Mukta and Tapti oil and gas fields off the west coast. BG has 30 percent interest in the fields where ONGC has 40 percent and Reliance Industries the remaining 30 percent.
"We are looking at drilling more wells in the PMT fields," he said.
BG Group plans to invest USD 500 million in India's oil exploration and production sector in the next five years.