Only BP interested in Mumbai High TSP job
ONGC is talking to BP about a Technical Service Provider (TSP) contract at the mature Mumbai High field.
By September 15 (2024), ONGC wants bids for the ten-year contract with an optional five-year extension. ONGC issued the tender on June 1 (2024) with stiff financial and technical eligibility criteria, meaning just Chevron, ExxonMobil, Total, BP, and Shell would have qualified.
A well-placed source says only BP seems interested, "Very high-level discussions have been going on with BP," he says. "Senior BP executives have held discussions with (ONGC chairman) AK Singh and (ONGC director production) Pankaj Kumar."
He adds: "BP has become lukewarm to the (TSP) idea following some disagreements with ONGC." In contention are ONGC's proposed financial terms.
"BP wants much better terms, but these are too controversial for ONGC to agree," he continues, declining to share details. "There's no way ONGC can concede."
Some say it's unsurprising that only BP is keen. "BP technical teams are in India working with partner Reliance (in Mumbai) for the KG-D6 fields," says another source.
"BP can send some of them to work with ONGC's Mumbai High teams." Still unclear is how the talks will move ahead considering the lack of common ground with ONGC.
As for the other oil majors, Exxon was initially interested but wanted an assurance that its earnings would not be subject to the government's windfall tax on oil and gas companies. "ONGC couldn't give that assurance, and nothing moved," we hear.
"Exxon also wanted better financial terms." Since July 2022, India has imposed a windfall tax on oil producers, revised every fortnight based on the previous two week's oil prices.
Neither Shell nor Chevron have shown much interest in the Mumbai High TSP contract. "Chevron doesn't have much of a presence in India," we learn.
"And Shell no longer has an upstream focus in India." Whoever is selected will receive a share of net incremental production capped at 25% and fixed fees.