Invezz.com - India’s Oil and Natural Gas Corporation said on Wednesday that energy major BP (LON:BP) Plc has won a bid to be the company’s technical service provider for boosting oil and gas production from Mumbai High field off the west coast of India.
State-owned ONGC had in June last year floated a tender seeking a foreign partner to reverse declining output at its flagship Mumbai High fields.
The Mumbai High field is the country’s largest producing field of oil and gas.
ONGC’s tender said it would offer a share of revenue from incremental production, along with a fixed fee but not any equity stake.
The tender had attracted two bidders – BP and Royal Dutch Shell (LON:SHEL).
“After the bid evaluation process, BP Exploration (Alpha) Ltd, a wholly-owned step-down subsidiary of BP Plc, UK has been selected as the technical service provider (TSP),” ONGC said in a stock exchange filing.
The TSP will review the field performance and identify improvements in reservoir, facilities and wells to enhance the production from Mumbai High field.The TSP has indicated a substantial increase in oil plus oil equivalent gas production (up to 60 per cent) from baseline production levels (reputed third-party vetted production estimates with natural decline) over the 10 year contract period.
ONGC’s declining production volumes
Production of oil peaked in March 1985 when the Mumbai High field’s output level touched 471,000 barrels per day.
Since then, output has steadily declined to about 134,000 barrels per day as of April 2024, according to the tender floated last year.
The Mumbai High field, which lies in India’s Mumbai Offshore basin in the Arabian Sea was discovered in 1974 and hydrocarbon production from the field began in 1976.
India’s oil needs
India meets more than 87% of its crude oil needs through imports.
The country plans to ramp up production of oil and gas to reduce its dependence on imports.
The Asian giant is also the world’s third-largest importer of crude oil, behind China and the US.
It is also one of the top importers of natural gas.
BP will act as a technical service provider for the field.
“We look forward to bringing our long experience of optimising performance and recovery from major mature fields around the world to help unlock and enhance production from Mumbai High,” BP said in a statement.
Additionally, the energy major has a tie-up with Reliance Industries (NS:RELI) and operates about 1,900 fuel retail stations across the country.
The tie-up also sees BP Plc assist Reliance in producing oil and gas from a deepwater block in the Krishna-Godavari basin, off India’s east coast.
Also, the Reliance-BP tie-up has connected with ONGC to bid for exploration rights for an offshore block in India.