EXCOM set to re-open talks with upstream majors

Vol 4, PW 7 (10 May 00) Exploration & Production

In the weeks ahead, a handful of multinational oil companies with deepwater exploration experience will be contacted by ONGC with an invitation to re-open talks.

Letters from the corporation's Exploration & Contracts Monitoring (EXCOM) division will ask the companies if they are still interested in farming-in to six deepwater permits, which were awarded to ONGC prior to the announcement of the New Exploration Licensing Policy (NELP). The move comes after an Indian cabinet decision on 22nd April (see: PW06, April 26th: 8--Anyone interested in a deepwater JV with ONGC) to grant ONGC fiscal benefits until now reserved only for acreage awarded under NELP.

Last year, opposition by the Indian oil ministry to ONGC's demand for NELP terms scuttled negotiations with Unocal, Total, Elf, Marathon Oil, Chevron and Mobil. All were at one stage keen to farm-in to some of ONGC's deepwater acreage.

"We have to re-open the dialogue with them to find out if they are still interested," a source at ONGC tells Petrowatch, "There has been a long period of silence between us." ONGC points to a change in the spot price of crude as a sign that the foreign majors will respond positively. "The climate is better than before because oil prices are higher." As usual, India's oil ministry has been slow to send EXCOM an official notification allowing it to proceed on the basis of the cabinet decision on 22nd April.

ONGC expects to receive this "any day now" and is readying itself by "going ahead and reprocessing the cases."