News Detail

• Sources have informed Bloomberg UTV that ONGC may be considering forming separate joint ventures for each of the four CBM blocks that it has in its portfolio and is likely to include more than one partner in each JV. In fact, sources have said that ONGC may be in advanced talks with Essar Oil, Reliance Industries and Great Eastern Energy for partnership to develop these blocks that together have a preliminary estimated reserves of about 6 trillion cubic feet of gas.
• However, sources also add that ONGC is likely to retain operatorship, which indicates that ONGC may go on to hold more than 40% stake in each block, while rest will be picked up by partners as per their investment. ONGC decided to rope in partners for the CBM blocks after it was forced to relinquish five blocks since the company found them commercially unviable.The sense is that the joint ventures will help the company mitigate the losses if the remaining blocks fail to shore up gas to the extent of the believed reserves. ONGC currently owns CBM blocks in Jharia, Bokaro, North Karanpura and Ranigunj after it recently gave up the South Karanpura block.
• Moreover, sources said that ONGC will require an investment to the tune of at least $2-2.5 billion to produce gas from all four blocks and including partners will ensure that it does not have to bear the entire cost. Now, while the exact shareholding for the blocks are yet to be decided and partnership to be firmed up, sources said ONGC is looking to expedite the process and complete the process by second half of 2012.However, all the four companies are yet to respond to Bloomberg UTVs email query.

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