ENI offers overseas exploration acreage to ONGC

Vol 9, PW 12 (22 Sep 05) Exploration & Production

ENI isnt wasting time cementing its new alliance with ONGC.

We understand the Italian major has already offered a few properties to ONGC in line with the MoU, signed between the two companies in Delhi on 6th September. It wouldnt be appropriate to reveal which properties these are at this stage, a senior ONGC official tells us.

But we are taking a look at the data and will decide soon. ONGC said its agreement with ENI promises an exchange of information on a range of deepwater exploration opportunities in India and abroad and is expected to lead to the exchange of equity interests in selected licenses.

One can only speculate where these selected licences are. In West Africa, ENI operates several deepwater projects offshore Nigeria, Angola, Congo and Gabon; in the Gulf of Mexico and off the coast of Brazil it is operator or partner in ultra-deepwater exploration.

Has ONGC reciprocated with equal generosity Unclear. ENI showed no interest in five nomination deepwater blocks for which only British Gas submitted bids.

ENIs only firm project with ONGC so far is in two exploration blocks won under NELP-V: deepwater offshore block AN-DWN-2003/2 near the Andaman Islands where it is operator with 40% with ONGC holding 45% and GAIL holding the balance 15%; and onshore block RJ-ONN-2003/1 in Rajasthan where it is also operator with 34% with ONGC holding 36% and Cairn Energy holding 30%. Expect this to change soon as both companies build on their new alliance.

We have exciting prospects for these two blocks in India, says ONGC chairman Subir Raha. This is the beginning of much wider cooperation.

In the MoU, ENI promises to transfer technical knowledge to ONGC to enhance its deepwater exploration and development capabilities. Where does this leave other majors like BP or Chevron who want a strategic alliance with ONGC Nowhere.