Standard Post with Image

BG India Walks Out Of ONGC JV in KG Blocks

  • Oil and and natural gas corporation (ONGC) on Wednesday said that BG Group has exited from three hydrocarbon blocks that the two held jointly. The foreign explorer will pay ONGC $50 million as per adjustments for unfulfilled work programme commitments. Financial Chronicle was first to report the development on January 2. Post BG Group’s exit, the state-run explorer will hold 100 per cent equity in these blocks, said ONGC chairman and managing director Sudhir Vasudeva.

  • BG is selling its entire 25 per cent participating interest in MN-DWN-2002/2 block in the Mahanadi basin across east coast. At the same time, it has also decided to forego 45 per cent in KG-OSN-2004/1 and 30 per cent in KG-DWN-98/4, both in Krishna Godavari basin.The explorers have notified a gas discovery in KG-OSN-2004/1 and second exploration well is under drilling. ONGC will start drilling in MN-DWN-2002/2 next month. On the other hand, KG-DWN-98/4 was relinquished in April 2010, said ONGC director (exploration) SV Rao. On BG’s exit, Vasudeva said, “They (BG) keep on consolidating acreages and shuffling its portfolio globally.”

  • ONGC chairman said, “The reason we’re taking these stakes is because we see a lot of value. There has been a gas discovery in one of these blocks and we see potential for more.”BG’s ecision to exit KG offshore block comes close on heels of the group’s decision to divest its stake in Gujarat Gas Company (GGCL). The present move is seen as BG Group’s strategy to scale down India operations.In an unrelated development, Oil and and natural gas corporation approved Rs 352.5 crore investment in its marginal field off the Mumbai coast. At present, the field, B-173A, is producing 1,870 barrels oil per day. Redevelopment programme for the field is likely to be completed by March 2014.At the same time, Oil and and natural gas corporation board also gave green signal for Rs 115 crore investment in the Heera and South Heera fields, situated 70 km South-West of Mumbai. Oil and and natural gas corporation announced four new discoveries in Gujarat and Assam.

Source