ONGC, Shell Energy India Sign Pact To Explore Deepwater Blocks, LNG Opportunities

Oil and Natural Gas Corp (ONGC) and Shell Energy India Private Ltd have signed a non-binding memorandum of understanding to explore joint opportunities in deepwater oil and gas exploration and liquefied natural gas sourcing, the state-owned firm said on Monday.

The agreement, signed on August 10, covers potential collaboration across India's energy sector, including joint participation in deepwater and ultra-deepwater offshore blocks offered under the government's Open Acreage Licensing Policy, or OALP, as well as future bidding rounds, ONGC said in a post on X.

ONGC and Shell Energy India will explore opportunities in OALP Rounds X and XI under the broader Samudra Manthan initiative, as well as potential farm-in and farm-out arrangements involving ONGC’s existing OALP blocks, the company said.

The memorandum does not commit either company to specific investments or projects and provides a framework for evaluating potential areas of cooperation.

The agreement with Shell builds on ONGC's recent efforts to bring international expertise into India's deepwater exploration programme. In August 2022, ONGC signed a Heads of Agreement with ExxonMobil to collaborate on deepwater exploration on India's eastern and western coasts.

ONGC has also signed memorandums of understanding with global majors including ExxonMobil and Chevron for deep- and ultra-deepwater exploration.

On its collaboration with Shell, ONGC said the MoU is to explore potential collaboration opportunities across India's energy sector.

The partnership brings together ONGC's position as India's largest oil and gas explorer with Shell's global expertise across upstream exploration and LNG, potentially creating opportunities for cooperation across both domestic exploration and gas supply.

The upstream component comes as India seeks to accelerate exploration of its offshore resources and attract investment and technical expertise into more challenging deepwater and ultra-deepwater acreage.

Under the proposed collaboration, the companies could participate jointly in future offshore licensing rounds and assess opportunities to bring additional partners into existing ONGC blocks through farm-in and farm-out arrangements.

The LNG component could also become significant as India seeks to increase gas consumption while meeting rising energy demand and diversifying its fuel supply.

The collaboration will focus on two key areas of mutual business interest.

"Upstream Oil & Gas: Exploring joint participation in deepwater and ultra-deepwater offshore blocks offered under (currently underway) Open Acreage Licensing Policy (OALP) Rounds X and XI, as well as future bid rounds, under the broader impetus of #SamudraManthan. The two companies will also explore farm-in/farm-out opportunities in ONGC's existing OALP blocks. The MoU sets out a non-binding framework for such collaboration," it said.

Secondly, the two firms would collaborate on LNG. "Exploring opportunities in #LNG sourcing to support India's transition towards a stronger gas-based economy.

"By bringing together complementary capabilities and global expertise, the collaboration seeks to create new synergies across the energy value chain, supporting deeper exploration, greater energy availability and India’s long-term energy security," ONGC said.

The companies will also explore opportunities to collaborate on LNG sourcing, as India seeks to expand the role of natural gas in its energy mix and strengthen the availability of gas supplies.

"Exploring deeper. Collaborating stronger. Powering India's energy future," ONGC said in a post announcing the agreement.

ONGC said the collaboration is intended to create synergies across the energy value chain and support deeper exploration, greater energy availability and India’s long-term energy security

The agreement is part of a broader push by Indian energy companies to secure additional domestic oil and gas resources while expanding access to LNG as the country seeks to build a more gas-based economy.