ONGC shortlists 9 companies for deepwater blocks

Vol 9, PW 1 (20 Apr 05) Exploration & Production

ONGC has shortlisted nine global oil majors that are interested in acquiring an equity stake in one or more of its five deepwater nomination blocks.

The companies are: ExxonMobil, BP, British Gas, ChevronTexaco, ENI, Andarko, Norsk Hydro, Petronas and BHP Billiton. We understand ONGC received a response from 16 companies.

Of these, Reliance, Hunt Oil and Talisman Energy were disqualified as they had hardly any experience of operating a deepwater field. Reliance insisted that it has experience with its KG basin deepwater block but ONGC refused to accept this position.

From the 13 companies left, nine sought extended time for data viewing. In response to individual requests from these companies ONGC decided to keep its deepwater dataroom in Mumbai open till 7th May.

ONGCs earlier plan was to close the dataroom on 31st March. Each of these companies wants between three and five days to view the data, ONGC tells us.

ONGC set up the dataroom in March and data viewing is free of cost. After the dataroom closes on 7th May, ONGC will give the nine shortlisted companies one month to submit a formal Expression of Interest.

In the intervening period, ONGC will hold discussions on various modalities of tendering the blocks. ONGC is offering NELP terms but several fundamental questions remain unanswered.

What price should ONGC ask for the data packages Should there be an upfront commitment payment How much equity should ONGC offer In what timeframe should contracts be awarded We could choose either a 50:50 joint venture or a 60:40 joint venture, ONGC tells us. Also undecided is whether ONGC should offer a service contract or a PSC.