Exxonmobil, ONGC to bid jointly for next OALP round

Will identify areas for exploration in deepwater on east and west coasts of India

American energy giant Exxonmobil and Oil and Natural Gas Corporation (ONGC) are set to jointly bid for the upcoming sixth and seventh auction rounds under the Open Acreage Licensing Policy (OALP).

The companies are discussing the submission of expressions of interest (Eois), the last date for which is November 15. This comes at a time when ONGC is expected to bag seven blocks under the fifth OALP round, while four blocks are likely to go to Oil India (OIL). A formal announcement is likely at any time.

“This is going to be a huge development for India’s hydrocarbon sector. If ONGC and Exxon are able to zero in on areas of mutual interest, they will be submitting Eois for the sixth and seventh rounds of the OALP,” said a government official in the know.

ONGC and Exxon Mobil had in October 2019 signed a memorandum of understanding for enhancing energy ties between India and the US. The two companies are to identify areas for exploration in deepwater on the east and west coasts of India. “Joint bidding by Exxon with ONGC is a positive for the Indian company and improves the perception of the country’s sedimentary basins,” said R S Sharma, former chairman and managing director, ONGC.

“It would be after a decade and a half that a company that’s globally No. 1 in exploration and production would be participating in Indian exploration bidding rounds. This re-establishes the credibility of the regulatory regime,” Sharma said.

Another industry official said to make the environment more lucrative for overseas players, the government should take a call on a floor price for domestic natural gas, which dropped to $1.79 a million metric British thermal unit (mmbtu) for the October-march period of the current financial year, down 25 per cent from $2.39 per mmbtu during AprilSeptember. There were no private players in the fifth OALP round. OIL will get two blocks each in Rajasthan and Assam.

ONGC will get one block each in the Cambay, Bengal Purnea, Saurashtra, Cauvery, Mumbai Offshore, and Kutch Basins. During the fifth round, the only block that had multiple bids was the northern part of the Cambay basin. This Ahmedabad-mehsana block has the Sobhasan field to its west and the Mansa field to its southeast, and is likely to go to ONGC. All the seven blocks on offer had gone to ONGC in the fourth round. In the first three rounds of the OALP, Cairn Oil & Gas, a vertical of Anil Agarwal’s Vedanta, had got 51 blocks, which was the highest, of the 87 on offer.