Anyone interested in a deepwater JV with ONGC?

Vol 4, PW 6 (26 Apr 00) Exploration & Production

Indian politicians have once again proved just how hopelessly out of touch they are with economic ground realities.

On 22nd April cabinet spokesman Pramod Mahajan proudly announced that India's Cabinet Committee on Economic Affairs (CCEA) has agreed to let ONGC sign joint venture agreements with foreign oil majors to explore in six of the corporation's deepwater permits. All six (two in the Kerala Konkan, one in the Kutch basin offshore Gujarat and three in the Krishna Godavari basin) were awarded to ONGC prior to the New Exploration Licensing Policy (NELP).

Mahajan said the cabinet agreed ONGC would be paid international rates for any discoveries in these permits, and benefit from other fiscal benefit, until now reserved for acreage awarded under NELP. No doubt, the decision marks a significant about-turn by the Indian government, and has been duly welcomed by ONGC.

In theory it means ONGC can resume stalled negotiations with one or all of the six companies it shortlisted two years ago as potential deepwater joint venture partners: Mobil, Chevron, Unocal, Marathon, Elf and Total. But are these companies still interested! Hardly.

Two years have lapsed since ONGC first approached them. Total has since acquired Elf, Exxon has swallowed Mobil, and Unocal has lost interest in upstream India, while Chevron or Marathon never really was that keen.

More, ONGC's disappointing deepwater results over the past two years has added to a generally negative perception of Indian deepwater acreage relative to opportunities elsewhere. If the government had announced its decision two years ago, the story might have been different.

It only has itself to blame for another lost opportunity!