Business Line (Delhi) 20/01/06
16/s/o
ONGC, Shell ink pact for joint exploration
Our Bureau
DONE DEAL: The ONGC Chairman & Managing Director, Mr Subir Raha (left), exchanging documents with the Shell Companies Chairman, Mr Vikram Singh Mehta, after signing an agreement in Capital on Thursday in the presence of the Minister for Petroleum and Natural Gas, Mr. Mani Shankar Aiyar, the Shell Executive Director, Ms Linda Cook, and the British High Commissioner, Mr Michael Arthur. - Kamal Narang
New Delhi , Jan. 19
OIL and Natural Gas Corporation (ONGC) on Thursday signed a memorandum of understanding with Shell Exploration Company B.V. for wide ranging co-operation in hydrocarbons value chain.
The MoU will cover upstream and downstream activities and provides for joint exploration and production of oil and gas in India and overseas. The MoU also envisages development of coal-bed methane (CBM) gas, export of petroleum products from Mangalore Refinery and Petrochemicals Ltd (MRPL), manufacture of hi-grade bitumen and possible co-operation in petrochemicals.
"We shall investigate setting up a joint venture for bitumen business in India and evaluate joint business opportunities in marine fuels and lubricants," Mr Subir Raha, Chairman and Managing Director, ONGC, said at a function here on Thursday. Both have proposed to collaborate in Sakhalin and Hazira projects.
Opportunities: The tie-up has also opened possibilities of Shell's participation in ONGC-MRPL's new 15 million tonnes refinery and petrochemical complex, Mr Raha said. As regards ONGC's chances of picking up a stake in Shell's Hazira LNG import terminal in Gujarat, both Mr Raha and Mr Vikram Singh Mehta, Chairman, Shell Companies in India, remained non-committal.
Shell and ONGC would now be setting up a steering committee to manage co-operation between them. ONGC would offer Shell farm-in NELP blocks and bid jointly in the next round of New Exploration Licensing Policy (NELP).
Mr Mehta said, ``Shell is not present in upstream business in India. This MoU will fulfil the gap.'' The MoU also provides for joint development of downstream supply chain - distribution and marketing of petroleum products. Mr Mehta said Shell's equity participation in any project would be decided after detailed study.
In his address at the function, the Petroleum Minister, Mr Mani Shankar Aiyar, said, "The MoU covers the areas of my deepest concern, that is, the importance of strengthening our knowledge base. We have to exponentially increase our domestic production of oil and gas even if acquisition of overseas properties looks attractive. Energy security, like charity, begins at home."
The Minister also said Shell's presence would help boost domestic exploration and lead to tapping untouched reserves.
Hazira terminal: Responding to queries, Mr Vikram Singh Mehta said that ``we have absolutely no interest of selling our Hazira plant. The plant is operational and we continue to seek customers.'' He said the 2.5-mt Hazira LNG import and regasification terminal and port were fully operational.
He, however, reiterated that Shell was open to getting more equity partners in the project. "We are prepared to take potential partners who could bring value to the project," he said.
ONGC and Hindustan Petroleum Corp Ltd have shown interest in picking up a stake. Total of France had last year picked 26 per cent stake in Hazira terminal. The rest 74 per cent is now with Shell Hazira Gas Pvt Ltd.