ONGC Rallies 3%; Market Valuation Surges Rs 9,749.72 Crore

Shares of ONGC climbed 3 per cent on Wednesday, on a day when UK's BP Plc won a bid for ONGC's giant Mumbai High oil and gas field, offering to raise crude oil production by 44 per cent and natural gas by a staggering 89 per cent over a 10-year period.

The stock went up by 2.94 per cent to settle at Rs 271.25 on the BSE. During the day, it rallied 3.77 per cent to Rs 273.45.

At the NSE, shares of the firm jumped 3 per cent to Rs 271.50.

The company's market valuation surged Rs 9,749.72 crore to Rs 3,41,240.07 crore.

Oil and Natural Gas Corporation (ONGC) in a stock exchange filing said it has selected BP Exploration (Alpha) Ltd, a wholly-owned step-down subsidiary of BP Plc, as the Technical Service Provider (TSP) for raising production in the field.

ONGC had in June last year floated a tender seeking foreign partners to reverse declining output at its flagship Mumbai High fields, offering a share of revenue from incremental production plus a fixed fee but not any equity stake.

BP and Royal Dutch Shell put in an Expression of Interest (EoI) at the close of the tender in September.

Shell, however, did not put in the final price bid, which was to detail the incremental production and the revenue share sought from it. BP was the only firm that put in the bid.

"After the bid evaluation process, BP Exploration (Alpha) Ltd, a wholly-owned step-down subsidiary of BP Plc, UK has been selected as the TSP," ONGC said.

"The TSP will review the field performance and identify improvements in reservoir, facilities and wells to enhance the production from Mumbai High field. The TSP has indicated a substantial increase in oil plus oil equivalent gas production (up to 60 per cent) from baseline production levels (reputed third-party vetted production estimates with natural decline) over a 10-year contract period."

BP has two years to show results i.e. raise production over and above the agreed baseline output.