Indian Express: Shell-ONGC tie-up may take roots in KG basin

The recently-announced strategic alliance between state-run Oil and Natural Gas Corporation (ONGC) and global energy major Royal Dutch Shell could go much beyond the retail oil marketing space and see the Netherlands-headquartered multinational pumping in billions of dollars and technology to tap into the Indian PSU's promising deep-water gas blocks in the Krishna-Godavari Basin off the east coast.

ONGC has offered Shell an equity stake in its KG Basin block that lies adjacent to Reliance Industries' struggling D6 block, said a top official from the PSU. The alliance is sought by ONGC as it is keen that any technological insufficiency should not hamper exploitation of the gas reserves. The company has pinned its hopes on the KG DWN-98/2 block to salvage its falling gas production.

"We have submitted a proposal to Shell for equity investment and technical collaboration in our deep-water KG Basin block. Shell is currently studying the proposal and we are awaiting their response," ONGC's director (exploration) Narendra Verma told FE. Verma added that there was no fixed percentage of stake that was on offer to the Anglo-Dutch energy company. "Shell could take 10%, 20% or even 30%, depending on their appetite," he said. MORE