BG India and Oil and Natural Gas Corporation (ONGC) are in a dialogue for partnering each other in acreages both within and outside the country.
NEW DELHI: BG India and Oil and Natural Gas Corporation (ONGC) are in a dialogue for partnering each other in acreages both within and outside the country.
The two companies, which signed a production sharing contract with the government for a Krishna Godvari block on Friday last, had reached an understanding for a strategic alliance in December, 2005.
Speaking to DNA Money, BG India managing director William Adamson said: “Active dialogue is going on with ONGC for acreage within India and outside.” He said it could take several forms provided it was attractive for BG’s global portfolio.
BG India has invested about $900 million in India since it entered the country in 1995. Most of it has been in the upstream oil and gas production business, mainly in the Panna-Mukta-Tapti (PMT) fields, where it is a joint operator with ONGC and Reliance Industries Ltd. The consortium has so far made an investment of about $1 billion in PMT fields.
On being asked the status of three fields that ONGC had farmed out to BG - the ministry of petroleum and natural gas had struck down the contracts — Adamson said the company was still hopeful of executing them.
“Discussions are going on with ONGC and the ministry of petroleum and natural gas. We are also carrying on with diplomatic efforts.”
He said the contracts were awarded to BG after an empowered group of ministers had agreed to the bidding norms in which the minimum work programme was to be finalised after bidding.
BG’s was the only bid and was approved by the ONGC board in March last year, but it was rejected by the ministry in June. “Single bids don’t disqualify you. We took part in the due process,” Adamson said.
ONGC had so far invested Rs 1,400 crore in the three fields. Further investment was to have been done only by BG. “In the minimum work programme, ONGC does not invest any money. Risk is only BG’s,” he said.
With regard to the future, Adamson said since exploration and production requires more investment, the company would invest more in this area.
It would also be looking at expanding business in city gas distribution (CGD) activity.
It has the government permission for setting up three subsidiaries for CGD business in Karnataka, Tamil Nadu and Andhra Pradesh. The company is already present in Gujarat and Mumbai through its companies Mahanagar Gas and Gujarat Gas.
Adamson said the CGD market in India was very large and the company, with expertise in this area, was waiting for the regulatory framework to be in place.
“We are waiting to see what binding process would be adopted by the regulator (Petroleum and Natural Gas Regulatory Board).”
CGD would include both piped and compressed natural gas business besides cogeneration projects.
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