Norsk Hydro to take 10 pc in ONGC gas field

NEW DELHI: After Petrobras of Brazil, Norway's Norsk Hydro has agreed to take a stake in Oil and Natural Gas Corp's (ONGC) gas discovery block off the east coast.

Norsk Hydro will take 10 per cent stake in the block KG-DWN-98/2 for $26 million and will have the option to raise it to 20 per cent, an ONGC press release said here.

ONGC last evening signed an agreement with the Norwegian deepwater export to develop deepwater oil and gas blocks. The agreement was signed by Director (offshore) N K Mitra and Director (exploration) D K Pande on behalf of ONGC and Tore Torvund, Executive Vice President, Norsk Hydro.

Petrobras had last month picked 15 per cent stake, with an option to raise it to 30 per cent, in the block where ONGC has reported six discoveries, the latest one at UD-1 well being assessed by upstream regulator DGH as holding 2.08 trillion cubic feet of reserves.

The block sits next to Reliance Industries' 50 trillion cubic feet KG-D6 block. Before farm-in by Petrobras, the block had ONGC holding 90 per cent stake and Cairn India the remaining 10 per cent interest.

ONGC Chairman and Managing Director R S Sharma said his company, Petrobras and Norsk Hydro will do a joint appraisal of the gas discoveries in the block and prepare a development plan.

Oslo-based Norsk Hydro will also give ONGC technological support to increase the recovery from Vasai East oil field, off the Mumbai coast. The state-run oil major will pay seven million dollars to Norway's second-largest oil company for the job.

Vasai East is an oilfield off the western coast where there are challenges in producing oil from thin oil zones. Norsk has experience for developing such zones in the Troll field.

Norsk Hydro would also provide ONGC with offshore operator know-how. ONGC has offered the company a stake of upto 30 per cent in 32 offshore blocks.
The Norwegian firm will evaluate data on the blocks and has the option to become joint operator with ONGC and take an equity share in any of these blocks.

The blocks offered include 26 in deepsea and six in shallow waters. Of the 26 deepwater blocks, 12 are in ultra- deepwaters. ONGC has 100 per cent participating interest in 12 blocks and the balance is with others having various participating interests.

An extensive programme for transfer of knowledge between the two companies will be implemented in particular through Norsk's potential role as joint operator in deep water blocks.

"Norsk Hydro is very pleased to have signed this agreement that is the start of a strategic alliance between the company and ONGC," said Torvund.

The Indian shelf is an interesting exploration area that recently has yielded very good results. The agreement gives Norsk Hydro an opportunity to exploit deep-water skills in close cooperation with ONGC, he added.