ONGC board approves KG farm-out with BG

Vol 9, PW 23 (09 Mar 06) News in Brief

ONGC directors have approved the long-awaited farm-out agreements with British Gas for three gas-prone Krishna Godavari deepwater blocks at their last meeting on 3rd March.

Expect the agreements to be signed later this week or early next week. We are waiting for the final minutes and then the date will be finalised, says a source.

ONGC has agreed to let BG farm-in 50% to each block. Once the farm-out agreements are signed BG will begin review of the (mainly well log) data from ONGC for these fields, we hear.

After this the joint operating agreement and the PSC will be signed. BG and ONGC jointly sit down to draw up an exploration work programme for the three blocks only after data is handed over.

Before the PSC is signed the farm-out to BG will have to be approved by the oil ministry considered a formality - as these blocks were given to ONGC under a special dispensation.