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Exxon Mobil (NYSE:XOM), BP (BP) and Shell (SHEL) have held preliminary discussions with Oil and Natural Gas Corp. for a potential partnership in the Indian company’s $5B deepwater project in the KG basin, The Economic Times reported Wednesday.
The bloc off India’s eastern coast has faced prolonged delays and underperformance, prompting ONGC to seek partners with advanced capabilities to navigate the basin’s complex geology, according to the report.
The report sees Exxon (NYSE:XOM), with deep experience in deepwater drilling, as the most serious contender, noting CEO Darren Woods visited New Delhi in February in the first such visit by an Exxon CEO in a decade, and met oil minister Hardeep Puri, ministry officials and ONGC executives.
BP’s (BP) chances reportedly appear slim due to a potential conflict of interest, as BP and partner Reliance Industries operate an adjacent KG block and have been in a prolonged legal dispute with the government following ONGC’s 2014 accusation that the partners extracted gas that had migrated from ONGC’s block.
ONGC’s KG block produces ~33K bbl/day of oil and 2.5M cm/day of gas; production began last year, with peak output targets set at 45K bbl/day of oil and 10M cm/day of gas, significantly lower than 2016 projections of 70K bbl/day of oil and 16.3M cm/day of gas.