RIL and ONGC join hands to share infrastructure
months of tough negotiations, the DirectorateGeneral of Hydrocarbons (DGH) has clinched a ‘marriage of convenience’ between two arch rivals of India’s oil and gas exploration business —ONGC and Reliance Industries Ltd (RIL).
With this agreement, RIL and its partner BP Plc, will be able to transport gas from their newer fields in Krishna Godavari Basin (KG-D6) block using a sub-sea pipeline passing through edges of ONGC’s block in the neighbourhood.
Atanu Chakraborty, Director-General, DGH, said, “The need for having such a mechanism was felt more when we went for Discovered Small Fields auction round. Joint use of infrastructure — whether the player is from public sector or private sector — is beneficial for all.”
Interestingly, few years ago, the two companies had entered into a memorandum of understanding (MoU) to explore the possibility of sharing infrastructure on the East Coast of the country. The urge to bring the two rivals on board was because of Narendra Modi setting a target for the Ministry for Petroleum & Natural Gas to reduce import dependence by 10 per cent by 2022. Secondly, from these fields RIL and its partner expect to start production by 2020-21 with peak output expected to be about 15-20 million standard cubic metres a day.
The concept of infrastructure-sharing is very common among international players in oil and gas exploration and production business, as it brings down cost. In India, it has been arbitrary and also leads to duplication of facilities as each would like to create their own infrastructure.