ONGC, Shell India ink pact to explore deepwater blocks, LNG sourcing

State-run Oil and Natural Gas Corporation (ONGC) and Shell Energy India have signed a non-binding memorandum of understanding (MoU) to explore opportunities in deepwater and ultra-deepwater oil and gas exploration as well as liquefied natural gas (LNG) sourcing.

The agreement included a framework for the two companies to assess potential areas of cooperation across India's energy sector. It does not commit either side to a specific investment or project.

Also Read: L&T bags major offshore orders worth Rs 5,000-10,000 crore from ONGC for pipeline replacement

Deepwater exploration in focus

Under the agreement, ONGC and Shell Energy India will explore joint participation in deepwater and ultra-deepwater offshore blocks offered under the government's Open Acreage Licensing Policy (OALP).

The companies will assess opportunities in the ongoing OALP Rounds X and XI and future bidding rounds under the broader Samudra Manthan initiative, ONGC said.

They will also explore potential farm-in and farm-out arrangements involving ONGC's existing OALP blocks, allowing the companies to assess ways of bringing additional expertise and partners into offshore exploration projects.

The proposed cooperation comes as India seeks to step up exploration of its offshore oil and gas resources, particularly more technically challenging deepwater and ultra-deepwater acreage.

ONGC has previously partnered with global energy companies to bring international expertise into its deepwater exploration programme. In August 2022, the state-run explorer signed a Heads of Agreement with ExxonMobil for deepwater exploration on India's eastern and western coasts.

It has also entered into MoUs with global majors including ExxonMobil and Chevron for deep- and ultra-deepwater exploration.

LNG sourcing another focus

The second pillar of the agreement is LNG sourcing, as India seeks to expand natural gas consumption and diversify its gas supplies.

ONGC said the companies will explore opportunities to source LNG to support India's transition towards a more gas-based economy.

Also Read: Oil India chief Ranjit Rath among applicants for top job at ONGC

India has been seeking to increase the share of natural gas in its energy mix while expanding access to reliable and diversified supplies. LNG imports are expected to remain important as domestic gas production alone may not meet rising demand from sectors such as fertilisers, city gas, power and industry.

The proposed collaboration therefore brings together ONGC's position as India's largest oil and gas explorer and Shell's international expertise across upstream exploration and LNG.

What the MoU means for ONGC, Shell

The MoU is non-binding, meaning neither company has committed to a particular investment, project or financial outlay at this stage.

Instead, it gives ONGC and Shell Energy India a framework to identify and evaluate potential projects spanning domestic offshore exploration and international LNG sourcing.

ONGC said the partnership is intended to create synergies across the energy value chain, supporting deeper exploration, greater energy availability and India's long-term energy security.

The agreement comes as India simultaneously seeks to unlock more of its domestic hydrocarbon resources and secure additional LNG supplies to meet rising energy demand.