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Petrobras to exit ONGC block in KG basin

Brazil's Petrobras had decided to quit ONGC's prolific gas discovery block in the KG basin.

Written by Agencies | New Delhi |
January 3, 2010 2:07:01 pm

Brazil’s Petrobras had decided to quit Oil and Natural Gas Corp’s (ONGC) prolific gas discovery block in the Krishna Godavari basin,a vacancy that Royal Dutch/Shell and BP Plc are keen to fill-in.

Petroleo Brasileiro SA or Petrobras,Brazil’s state-controlled oil firm,wants to offload its 15 per cent stake in KG-DWN-98/2 to ONGC as it wants to concentrate on developing massive oil and gas finds back home,a top official said.

The vacancy may not last long as Shell and BP Plc have expressed interest in taking the stake in the block that sits next to Reliance Industries’ giant KG-DWN-98/3 or KG-D6 block off the east coast.

Shell has offered technology to convert natural gas into liquid (liquefied natural gas) at a floating offshore facility at the deep sea and then transporting the fuel in ships to the shore. BP on the other hand has offered the conventional technology of producing gas at an offshore platform and then transporting it to land through under-sea pipelines.

“For us,Shell technology makes more sense,” he said,adding,a decision to induct Shell or BP can only be taken after ONGC acquires Petrobras’ shareholding in the block.

ONGC has made 10 gas discoveries,including the ultra deepsea UD-1 find in the block where Hydro Oil and Energy India BV – a unit of Norway’s StatoilHydro and Cairn India hold 10 per cent a piece.

The discoveries are estimated to hold anywhere between 5 and 15 trillion cubic feet of inplace reserves.

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